Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — PRICES AND CONSUMER PROTECTION

Price Commission Bill

Mr. Hal Miller: asked the Secretary of State for Prices and Consumer Protection what representations have been made to him about the Price Commission Bill since it was published.

The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser): The Bill received its Second Reading on 27th April. Discussions are continuing with interested parties on the detailed operation of the proposed new powers.

Mr. Miller: Will the Minister explain, however, what is to happen to a firm that

is just starting up which has a low reference margin of profit? How is it to increase its profitability? In that connection, will he accept that the proposals do nothing towards the Government's aims of restoring profitability to industry and keeping down prices?

Mr. Fraser: The objectives of the Bill are directed both at investment and at keeping prices down. The question of a new firm would be a subject for discussion on the new Price Code, on which discussions will start taking place quite shortly.

Mr. Anthony Grant: What representations has the hon. Gentleman received from small firms which have been much oppressed by the outrageous bureaucratic burden placed upon them by the Price Commission? Is he aware that one firm of which I know received a 29-page questionnaire? Will he take notice of these complaints?

Mr. Fraser: Small firms have no monopoly of complaint about the information which they have to give to the Price Commission. We appreciate that difficulties exist. These are under consideration.

Mr. Freud: By what criteria were firms selected for investigation, and what plans does the Minister have to modify the arbitrariness of selection in the Bill? Secondly, what safeguards will the Secretary of State introduce in the Bill to


protect the position of firms during the period of the freeze?

Mr. Fraser: In respect of the hon. Member's first supplementary question, the criteria contained in the Bill were selected with a view to both certainty and a certain degree of flexibility. On the question of safeguards, one of the clauses in the Bill obliges my right hon. Friend to publish information on safeguards. Clearly, those must be the subject of consultation first, but my right hon. Friend will make an announcement on the matter as soon as consultations are completed.

Mr. Sainsbury: asked the Secretary of State for Prices and Consumer Protection what effects he expects the Price Commission Bill to have on the retail price index in the 12 months from its enactment.

The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): I would refer the hon. Member to the speech I made on Second Reading of the Price Commission Bill on 27th April.

Mr. Sainsbury: The Secretary of State's expectations of dramatic reductions do not seem very high. Is he satisfied that the whole exercise is worth while, bearing in mind the enormous administrative difficulties and costs imposed on industry in dealing with even routine inquiries, let alone the new investigatory type of inquiries? Is he satisfied that it is possible to obtain the quality of staff that will be required for the Price Commission to carry out investigations of that sort, which are based on totally unquantified criteria and which call for a totally different set of qualifications from those possessed by the present Price Commission staff?

Mr. Hattersley: I have no doubt that we shall be able to obtain both the quality of staff and the quality of Commission membership to carry out the policy in a sensible and positive fashion. On the subject of the administrative burden placed on industry, perhaps we have not made sufficient of the point that we propose to ask industry to supply less information. In the crude form, that means filling in fewer forms and providing fewer statistics than was the case

under the old 1973 Act—an Act which, I think, the hon. Gentleman supported but an Act which certainly imposed far too much of a bureaucratic burden on industry. That bureaucratic burden will be lifted after 1st August.

Mr. Christopher Price: In his efforts to keep down the index of retail prices, is my right hon. Friend aware that he needs far more help in trying to find out the real profits of some of the companies involved? Is he aware that Brooke Bond Oxo has increased the price of tea in many of the supermarkets in my constituency by up to 300 per cent. in the past six months? When is the Price Commission's report on tea and coffee to come out?

Mr. Hattersley: When the Price Commission has completed it. It would be wrong of me to require it to do a half-rate or shoddy job because politics required a quick report which was less than conclusive. I said that I understood the strong feelings of many consumers about the increased prices of these basic commodities. But it would be dishonest of me to pretend that there was very much that the Government could do about increased prices as these commodities enter the ports. If the Price Commission reveals that some companies have been exploiting that situation, given the powers we shall take action, but until then it would be wrong to pretend that any other course was open to us.

Mr. Dykes: Is there any truth in the peculiar rumour that the recent cement price increase application was turned down by the Price Commission because of the pending Price Commission Bill? If not, will the Secretary of State say why the Price Commission turned down the application from the cement industry for what looked to be a reasonable price increase?

Mr. Hattersley: The answer to the direct question is essentially one for the Price Commission, and the hon. Gentleman should refer it to that Commission. But it seems to me inconceivable that it should have done that in anticipation of a new Bill. That is really something of a question mark against the integrity of


the Commission. I do not believe that the Price Commission behaves in that way.

Mr. Stan Crowther: Does my right hon. Friend agree that a significant factor is sheer profiteering on the part of retailers—certain retailers, not all of them—including some large companies which are paid to increase their prices week by week, and sometimes day by day, quite irrespective of the original commodity price? Does my right hon. Friend think that the measure now proposed will put an end to that kind of abuse?

Mr. Hattersley: I think it is easy for consumers to note increases in individual prices and not relate them to the overall profitability of the companies from which those commodities are purchased. The margin control which was introduced in 1973 and which, if the Bill is passed, will be continued in the new Price Commission Bill ought to prevent—and, I believe, in general does prevent—unreasonable profits being made across the entire enterprise by individual retailers. If, however, there are cases where this happens, the new powers will enable us to take more specific action against them, and I shall not hesitate to do that.

Mrs. Sally Oppenheim: As the latest Price Commission report reveals that there has been an unusually high level of price notifications, and that there is now serious doubt about whether price increases on the six-monthly level are likely either to stabilise or to fall, can the Secretary of State comment on the validity of the Prime Minister's statement at the weekend that the Government are winning the battle against inflation, particularly as the Price Commission's commodity index is rising by over 49 per cent. on an annual basis?

Mr. Hattersley: I have already done so, but I shall gladly repeat it for the hon. Lady. There is no question at all but that the index of retail prices will remain at or about its present level for the next three or four months. It will then begin to reduce from autumn onwards, and that will continue through the winter and into 1978. That is what I have been saying for the past six months. That is what the hon. Lady has been denying for the past six months, and during that time I have been proved right month by month by month.

Retail Prices

Mr. Neubert: asked the Secretary of State for Prices and Consumer Protection what is the most recent increase over a period of six months of the retail price index of all items excluding seasonal foods.

Mr. Hattersley: 8·9 per cent.

Mr. Neubert: Does the right hon. Gentleman recall that in an answer to me on 7th February he pooh-poohed the Price Commission Chairman's forecast of 19 per cent. inflation by the spring? Now that both spring and 19 per cent. inflation are with us, what answer has the right hon. Gentleman to the Price Commission Chairman's latest forecast last Thursday that prices will continue to rise well into the summer?

Mr. Hattersley: I hope that I did not pooh-pooh what the Chairman of the Price Commission said. What I said then, and I repeat it now, is that the idea of 19 per cent. inflation—which the following week the hon. Lady the Member for Gloucester (Mrs. Oppenheim) said would be 20 per cent.—was not only wrong but demonstrably wrong as soon as the retail price index was published. My forecast had been consistent for six months. Inflation will continue at or about the present level until the late summer, when there will be continual though gradual decline in the RPI.

Mr. Buchan: Is my right hon. Friend aware that many of us on the Government Benches were very pleased to read his speech over the weekend? It was perhaps a belated conversion but no less welcome for that. Does he not agree that the biggest single factor now affecting food prices in this country is our membership of the EEC, together with the common agricultural policy? Is he further aware that this is due more directly to the steps that have to be taken in relation to the CAP and indirectly to world prices as a whole?

Mr. Skinner: Talk!

Mr. Hattersley: I am grateful for my hon. Friend's support. I hope that that support will not be moderated when he discovers that one newspaper said yesterday that I began my criticism of the CAP by saying that I continued to believe


that Britain's future lay, and ought to lie, within the EEC. Although the CAP has been in existence a long time, I believe that it needs radical change and substantial adjustment. I hold that view strongly, and my hon. Friend will recall that my right hon. Friend the Minister of Agriculture has done his best to make marginal adjustments to the surplus policy in relation to the CAP. I hope that we can do more in the years that lie ahead.

Mr. Adley: I recognise that the CAP is one factor in the increase in food prices, but does not the right hon. Gentleman agree that the main reason is our appalling domestic inflation, for which the right hon. Gentleman's Government are largely responsible? Can he confirm to as many of his hon. Friends as appear to be unaware of it that items such as coffee and tea are not grown in EEC countries?

Mr. Hattersley: The hon. Gentleman must decide which point he wants to make. I have always said that there are three reasons for our rate of inflation. One reason was the depreciation of sterling, the second was the drought of last year, and the third was increased commodity prices. The hon. Gentleman is right to say that commodity prices, coffee and tea in particular, lie outside the control of the EEC. They are also outside the control of the British Government, and I hope that the hon. Gentleman will not blame us for them.

Mr. Jay: In fairness to my right hon. Friend the Secretary of State, may I ask him to accept my congratulations on having caught up with what everyone else has been saying for 10 years?

Mr. Skinner: That is the point—he has not.

Mr. Hattersley: As that is the nearest I have ever got to a compliment from my right hon. Friend, I had better accept it gladly.

Mr. Marten: I congratulate the Minister on part at least of his speech. Does he recall referring in that speech to a severe and fundamental change needed in the CAP? From his experience as Minister of State at the Foreign Office in charge of European affairs, does he think that there is a real chance of any fundamental

changes or merely of the marginal changes to which he has just referred?

Mr. Hattersley: I am trespassing on the ground of others, but I believe that the prospects for a fundamental change are there, because an agricultural policy which creates surpluses intentionally, and increases them when they already exist, is in the interests of none of the member States, including the agricultural States. Sooner or later, I have no doubt, the entire nine members—and, perhaps more importantly, in four or five years the 11 members—will come to realise that that is true.

Mr. Ward: While it is true that the prices of tea and coffee are outside my right hon. Friend's control, is it not an unfair practice for some firms in London which sell coffee to insist on selling quantities of not less than half a pound at a price of £1·19? Is that not an unfair practice which his Department ought to look into?

Mr. Hattersley: One of the unfortunate features of the commercial life of some parts of our country is that when commodity prices increase a minority of firms seek to take advantage of them. I emphasise "a minority". It is because of that that we have asked the Price Commission to look at the margins on both those commodities, and I hope that the Price Commission will be able to report in the not-too-distant future.

Mr. Robert Rhodes James: asked the Secretary of State for Prices and Consumer Protection what is the most recent increase in retail prices over three months, expressed at an annual rate.

Mr. Sims: asked the Secretary of State for Prices and Consumer Protection how much retail prices have increased over the most recent 12-month period.

Mr. Canavan: asked the Secretary of State for Prices and Consumer Protection what is the latest rise in the retail price index.

Mr. Hattersley: The latest monthly rise is 1 per cent. and the latest year-on-year increase is 16·7 per cent. The latest three-monthly rise is 4·6 per cent. That could be said to produce an annualised figure of 19·9 per cent., though it would not be statistically valid as an indication


of the trend. [Interruption.] I really think that the hon. Member for Gloucester (Mrs. Oppenheim) is the most ill-mannered Member of the House. No doubt she will have a chance to ask a question in a moment. This brings the increase since February 1974 to 72·9 per cent.

Mr. Rhodes James: Is not the Secretary of State aware that these ever-increasing prices are literally becoming intolerable, particularly for the poor and the elderly, or have the Government completely lost touch with the realities of life facing these people?

Mr. Hattersley: Of course, we have not lost touch with that reality. What we have done is produce a policy, against which the hon. Gentleman voted last Wednesday, which, associated with our general anti-inflation strategy, will produce a fall in the RPI, to which I have already referred. What the Conservative Opposition have to decide is whether they wish to continue to draw attention to obvious facts or whether they want to advance an obvious alternative. Up to now they have failed to do the second, and they will continue to be descredited until they say something positive about prices rather than draw attention to them.

Mr. Sims: Is it possible that the figures that the Minister has just given us were responsible in part for the by-election result which, in the early hours of Friday morning, rendered the right hon. Gentleman untypically speechless? Can he tell us how he reconciles those figures with the claim that his Government have halved the rate of inflation?

Mr. Hattersley: There is no doubt that the recent by-election losses which my Government have sustained have been largely the result of price increases. No one in his right mind would choose to deny that. However, it is not our policy to make sudden panic changes in our policy to adjust to a temporary situation.

Mr. Skinner: Temporary!

Mr. Hattersley: I am equally sure that when the rate of inflation begins to improve, as it will in the autumn, we shall reap the benefit of that. Our intention is not to change policy every time there is a by-election reverse but to go on

doing what is right for the country and for the economy.

Mr. Canavan: In view of my right hon. Friend's weekend criticism of the common agricultural policy, a policy which has largely contributed to the enormous increases in the price of food, have the supporters of the Common Market at last seen the error of their ways? Will my right hon. Friend continue on this road to Damascus and back up his fine words with some action to end this dear food policy of the Common Market, which has robbed every housewife in the country?

Mr. Hattersley: Not only do I not see the error of my ways but I fear that I see the error of my hon. Friend's facts. The error inherent in his supplementary question is the suggestion that the common agricultural policy has played a substantial part in the inflation that we have suffered in the past three years. It has played a part, but it is not half as great a factor as are others. The Government are working on all those things and will, I believe, put them right. My criticism of the CAP was that it was economically wrong in itself, not that it played a substantial—let alone majority—part in the present rate of inflation.

Mr. Skinner: Does not my right hon. Friend think it is time that he stopped listening to the Tory hypocrites on the Benches opposite who are complaining about price increases whilst at the same time voting against the Price Commission Bill and becoming scared when people such as Jack Jones talk about a freeze on prices? Is he aware that if he wants to reverse results such as that at Ashfield last week, and if he wants to save the hundreds of Labour councillors who will be thrown on the scrapheap this week, it is time that he introduced a freeze on prices, because although he will then have antagonism from the Benches opposite and from the CBI we shall go on to election victory?

Mr. Rhodes James: On a point of order, Mr. Speaker. I object to being described as a hypocrite.

Mr. Speaker: Order. We all object to that, but I am able to rule when it is directed to an individual. I gather that the remark was addressed to the world at large.

Mr. Swain: On a point of order, Mr. Speaker. Is it not a fact that only five or six weeks ago you ruled me out of order because I wanted to raise a point of order during Question Time?

Mr. Speaker: The hon. Gentleman is quite right, and I ought to have asked the hon. Member for Cambridge (Mr. Rhodes James) to wait until the end of Questions. I am glad to see the hon. Member for Derbyshire, North-East (Mr. Swain) back in his place.

Estate Agents

Mr. Newens: asked the Secretary of State for Prices and Consumer Protection what progress has been made on the preparation of legislation to control estate agents.

Mr. John Fraser: I have nearly completed consideration of the representations we have received and I hope shortly to put forward firm proposals for early legislation.

Mr. Newens: Is my hon. Friend aware of the time that has elapsed since the matter was first raised and since my hon. Friend the Member for Ipswich (Mr. Weetch) embarked upon his admirable campaign to seek to lower the cost of house buying and give greater guarantees to home buyers? Is it not high time that we had action? Will he take every possible step to ensure that legislation is introduced at the earliest possible opportunity?

Mr. Fraser: As a private Member, I put forward my own Bill and I should like the legislation to go through as soon as possible. I am deeply grateful for the Private Member's Bill of my hon. Friend the Member for Ipswich (Mr. Weetch). It will act as an important catalyst and shows the general support for legislation on this subject, not only from the general public but from the professions as well.

Mr. McCrindle: Will the Minister take this opportunity of confirming that the majority of estate agents are honest and trustworthy and that they would be at the forefront in wishing legislation to be introduced to take care of the minority who are not? Will he also confirm that self-regulation may be the best basis of legislation when it is introduced?

Mr. Fraser: Of course the majority of agents are honest and reputable, and that is why they want the legislation as much as do the general public. On the second point, I have reconsidered the licensing system and I should hope to base legislation as far as possible on self-regulation, although that leaves problems with certain unattached estate agents.

Mr. Ioan Evans: When my hon. Friend is considering legislation, will he introduce a provision to enable local authorities to enter into this type of business, because it would be of advantage to house owners and house sellers if local authorities could undertake that type of work?

Mr. Fraser: I shall certainly give consideration to my hon. Friend's suggestion.

Food Prices

Mr. Durant: asked the Secretary of State for Prices and Consumer Protection by how much food prices have risen since February 1974.

Mr. Hattersley: The food index rose by 84·8 per cent. between February 1974 and March 1977.

Mr. Durant: Is the Minister aware that that is a pretty appalling figure? Is he further aware that in recent months the prices of basic foods, such as bread and cheese, have risen frighteningly for the housewife? Is he further aware that the housewife has no confidence that his Price Commission Bill will do any good whatsoever? Why do not the Government be honest and say that they have failed to control inflation?

Mr. Hattersley: The hon. Gentleman's question has three parts. Certainly some food prices have increased extraordinarily over the past year—coffee by 190 per cent, and tea by 120 per cent., for example. Those increases have contributed to the index and are wholly outside the Government's control.
Other food prices have not increased so much, including bread, on which the position has been pretty settled over the past three months. I do not believe for a moment that the British public are opposed to a system of selective price freezes. It is the Conservative Party that is opposed to price freezes on a selective or any other basis, and I have no doubt


that the British public support what the Government did last Wednesday.

Mr. John Evans: My hon. Friends were delighted to read my right hon. Friend's weekend speech about the need for reform of the common agricultural policy. Will he accept that many of us who deal weekly with our European counterparts in the European Assembly recognise that they will not allow us to change the common agricultural policy in any way? Will he also accept that if there is to be any structural reform or any marginal reform it is essential that Consumer Protection Ministers sit as of right with the Common Market Agriculture Ministers when they make their annual price reviews?

Mr. Hattersley: I disagree with my hon. Friend about the prospects of changing the CAP; I think that some marginal adjustments have already been made. Certainly, some holes have been punched in what were once the sacrosanct principles of the CAP. That has been done in the lifetime of this Government.
As far as consumer protection is concerned, I hope that I shall attend an Agriculture Council, as my predecessor did on one occasion. My hon. Friend will recall, however, that the Minister of Agriculture is also the Minister of Food. I think that no one in the House doubts that over the last month he has represented the interests of consumers as well as those of the producers, and we should congratulate him on that.

Sir David Renton: Is the right hon. Gentleman aware that, although there is room for some improvement in the CAP, the very large increase in food prices that he has announced this afternoon has been due almost entirely to the devaluation of the pound and the internal inflation of this country? Will he restrain his hon. Friends who criticise the CAP and tell them that our food prices are not due to that cause?

Mr. Hattersley: Not only am I aware of that fact, but I stated it before the right hon. and learned Gentleman arrived.

Mr. Heffer: Would not my right hon. Friend agree that the devaluation of the pound is very much influenced by our membership of the Common Market? Would he not also agree that ill manners

can be matched by a certain amount of arrogance, and that in that respect pro-Marketeers should look in the face those of us who have been against the Common Market and accept that they have been totally wrong and that we have been right?

Mr. Skinner: Austin Mitchell knew which card to play.

Mr. Hattersley: I hope that "Sayings of the Week" will include my hon. Friend's assertion that arrogance is wrong, followed by the assertion that he is right and everybody else is wrong. I have never claimed that the common agricultural policy is anything but bizarre—the word I used on Saturday. I agree with my hon. Friend that had we not been in the Common Market the problems of sterling that we encountered in September and October would have been different. In my view, they would have been very much worse. The run on the pound that we endured in the autumn of 1976 would have been infinitely greater had we not been supported by the powers of the EEC, under articles contained in the Treaty of Rome, that would have come to our aid in extremis.

Mr. Sainsbury: Will the Secretary of State agree that the price increases for tea and coffee to which he referred are indicative of what can happen to the price of an internationally-traded commodity when a surplus becomes a comparative shortage, largely because of increased consumption in the countries of origin? Is that not also indicative that a policy which is designed to increase and encourage European farm production is in the long run likely to be in the consumer's interest?

Mr. Hattersley: The hon. Gentleman ought to draw a distinction between the policy, which the Government certainly promote, of increasing domestic farm production—food from our own resources—and the EEC policy of encouraging overproduction. I find it difficult to justify a prices policy that is meant to produce more of a commodity which has already been produced in such quantity that it cannot be sold.

Nationalised Industry Prices

Mr. Dodsworth: asked the Secretary of State for Prices and Consumer Protection what representations he has


received from consumers about nationalised industries' prices since the beginning of the year.

Mr. Hattersley: Since the beginning of 1977 I have received about 70 representations on various aspects of nationalised industry prices. Most of these were from individual members of the public.

Mr. Dodsworth: Is the Secretary of State aware that most consumers feel that the Government have a direct responsibility for the prices being charged by nationalised industries, that they are bewildered by the succession of increased charges for rail fares and for gas and electricity and that they feel bewildered by the calculations, which seem to be designed to baffle them and to persuade them that price increases are justified?

Mr. Hattersley: If they are bewildered, I hope that the hon. Gentleman will join me in enlightening them. Nationalised industry prices have risen during the past three years because the Government which preceded this one chose artificially to keep down nationalised industry prices, irrespective of the effect on public expenditure, the rate of inflation and the public sector borrowing requirement. We put that right with the support of the more economically sophisticated hon. Members on the Opposition side.

Mr. Alexander W. Lyon: I recognise the force of the point made by my right hon. Friend, but does he recognise that our attack upon inflation does not appear credible to people who have had their gas prices and postal charges put up when in neither case was it necessary for economic viability in the industry concerned and it was simply a reflection upon the general economic policy of the Government? At least, at this stage the Government could have said that those two prices need not have gone up.

Mr. Hattersley: Let us consider the gas price for a moment, which I described at the time as a regrettable necessity. Had we not increased gas prices in the way that we did, £100 million would have been added to the public sector borrowing requirement, which would have had to be raised in some other form if we were to discharge our obligations to the IMF. We chose to

do it in that way. I know that one can argue that there are other ways and that some of them might have been less socially and, indeed, politically damaging, but I have no doubt that the general pattern, of which gas was a part, is the policy that will produce a real improvement in the inflation rate towards the end of the year.

Mrs. Sally Oppenheim: Is the Secretary of State aware that the latest Price Commission report, on page 11, again confirms that nationalised industry prices have risen far faster over the past three years than those of the private sector, and that that is not, as he claims, because of price restraint in the past, because they have been more than compensated under the Statutory Corporations Act? Will he, therefore, give an undertaking that it will be the first priority of his new Price Commission to examine and investigate all aspects of nationalised industries' prices?

Mr. Hattersley: I fear that the hon. Lady did not hear or did not understand my answer to the previous question. Nationalised industry prices have gone up over the past three years because the Government which she supported chose in the previous four years to hold them down in an artificially and economically damaging way.

Mrs. Sally Oppenheim: No.

Mr. Hattersley: As far as the Price Commission's intentions are concerned—the hon. Lady now confirms that she does not understand the Bill—the decisions as to what would be investigated are for the Price Commission, not for me.

Mr. Freud: Whatever the merits of the Secretary of State's answer, does he not now recognise that it is high time that the nationalised industries came under the same investigation and the same directions as industries in the private sector?

Mr. Hattersley: I am always encouraged by criticisms which begin by an hon. Member referring to "whatever the merits" of my answers. I am even more encouraged by the second half of the hon. Gentleman's question. The Price Commission Bill, which he clearly has not read either, imposes on


nationalised industries exactly the same obligations as those imposed on the private sector.

Consumer Protection Advisory Committee

Mr. Montgomery: asked the Secretary of State for Prices and Consumer Protection what were the factors employed in determining the composition of the new Consumer Protection Advisory Council and what remuneration each member of the Consumer Protection Advisory Council receives.

Mr. John Fraser: In appointing members to the Consumer Protection Advisory Committee, I aim to ensure that they have between them a wide background of experience. The Fair Trading Act requires specifically the inclusion of members with knowledge and experience of the production or supply of goods, of enforcement of consumer protection legislation, and of consumer organisations or consumer protection activities. The members of the committee do not at present receive any remuneration.

Mr. Montgomery: Will the Minister either confirm or deny that the legal adviser to the committee is a law student and is not fully legally qualified? Therefore, is this not a rather ridiculous situation when one has counsel having to deal with very complex points of law?

Mr. Fraser: I am afraid that the hon. Gentleman has been misinformed. One of the members of the committee is a law student, but she is not a member of the committee by virtue of the fact that she is a law student. She is there because of her experience with the Citizens Advice Bureaux. The legal expertise on the committee is provided by Professor W. A. Wilson, a Scottish academic lawyer, and by Mr. Keith Devlin, also an academic lawyer. The person whom the hon. Gentleman has in mind is not on the committee in a legal capacity.

Licensed Premises (Soft Mixer Drinks)

Mr. Hoyle: asked the Secretary of of State for Prices and Consumer Protection when action is going to be taken on the basis of the Price Commission's report on the prices charged for soft mixer drinks in licensed premises.

Mr. Hattersley: The report has been circulated to trade and consumer organisations, from which we have invited comments. When these are received, we hope to discuss the contents of the report with interested parties.

Mr. Hoyle: Will my right hon. Friend please note that the public are getting impatient for action on this matter? The brewers are not prepared to await the outcome of the beer reference, because, despite their high profits, they have already shown, by raising the price of beer, what they think about that.

Mr. Hattersley: I understand the impatience that people feel, particularly when they consider the frequency with which prices have been increasing in this industry and when they consider some of the profits. However, we have a reference to the Price Commission which I asked the Price Commission to undertake, without implying any necessary judgment about the performance of the industry. I hope that that report will come to me before the summer. My hon. Friend will recall, however, that, even if the report implies the criticisms which he suggests, at present the Government do not have the power to deal with that situation. If we carry the Price Commission Bill, we shall have the power, and if using that power appeared appropriate I should not hesitate to do so.

Value Added Tax-inclusive Pricing

Mr. Hooley: asked the Secretary of State for Prices and Consumer Protection what progress is being made on the reference to the Consumer Protection Advisory Committee on value added tax-inclusive pricing.

Mr. John Fraser: I expect to receive the committee's report on the reference by 18th May.

Mr. Hooley: Does my hon. Friend agree that it would be easier for consumers to see what they were being charged if "plus VAT" was not printed in tiny letters at the bottom of price notices? Will he press for this practice to be changed?

Mr. Fraser: There is a great wish by consumers that prices should be stated clearly, and the words "including VAT" are helpful. But there are difficulties. That is why the Consumer Protection


Advisory Committee looked at a reference from the Director General, and I hope that once the committee has reported there will be no delay in implementing its recommendations.

National Consumer Council

Mr. Mike Thomas: asked the Secretary of State Prices and Consumer Protection when he next plans to meet representatives of the National Consumer Council.

Mr. John Fraser: My right hon. Friend has no immediate plans to do so. At its invitation, he last met the full council on 14th February this year and has since had discussions with the council chairman.

Mr. Thomas: When the Secretary of State next meets the National Consumer Council, will he draw its attention to the speech that he made this weekend on the common agricultural policy? Is the Secretary of State aware that the Department is entitled to give to the National Consumer Council a remit to examine certain problems—approximately two a year, I believe? Will he also consider making a study of the changes that are needed in the common agricultural policy, so as to make it more consumer-oriented, as one of this year's remits to the council?

Mr. Fraser: I am sure that my right hon. Friend's speech has attracted so much attention that there will be no need for him specifically to draw the attention of the NCC to it. However, there is certainly no reason why my right hon. Friend should not consider the matters proposed by my hon. Friend, and even if he made no reference to the NCC I am sure that the NCC is capable of looking at the matter for itself.

Mr. Molloy: Is my hon. Friend aware that he is quite right in saying that great notice has been taken of my right hon. Friend's speech? But the speech itself will not be enough. What the housewives of this country are interested to know is when there are to be real efforts to hold prices. Will my hon. Friend tell my right hon. Friend that he has a vital rôle to play in helping the Government to achieve phase 3 of the social contract, and that it could well be that his failure in his job could jeopardise that endeavour?

Mr. Fraser: My right hon. Friend has no intention of failing in his job. He intends to achieve success. One of the contributions to that success will be the passage of the Price Commission Bill, against which the Opposition voted last Thursday although they have no alternative to put in its place.

Mr. Jay: But as most of the Tory Opposition voted for the European Communities Bill, will my hon. Friend explain to the National Consumer Council that all pro-Marketeers are hypocrites?

Price Commission Recommendations

Mrs. Knight: asked the Secretary of State for Prices and Consumer Protection what are the rules governing the overruling of a recommendation by the Price Commission; and what bodies or persons have the power so to overrule.

Mr. Hattersley: Under paragraph 6 of Schedule 2 to the Counter-Inflation Act 1973, a Secretary of State has power to permit a price increase when the Price Commission has used or is contemplating using its powers under Section 6 of that Act to restrict a price or charge. This may be done where, having consulted the Price Commission, the Secretary of State is satisfied that there are exceptional circumstances which justify an intervention. These are the only circumstances in which the Price Commission can be overruled.

Mrs. Knight: Does not the Secretary of State think that it is rather ludicrous to have an expensive, complicated and bureaucratic machine like the Price Commission which can be overruled at the whim of a Minister? Is it for real or is it not?

Mr. Hattersley: That expensive and complicated bureaucratic machinery was something which the hon. Lady voted for five years ago—

Mrs. Knight: No, I did not.

Mr. Hattersley: —and I voted against. But, putting that aside, I think that there are occasions when one would want to use a Minister's power to prevent the normal operation of the Price Code. The example I gave, without being prompted, was a gas price increase some months ago which was necessary to the economic package we put together in December. I


have do doubt that in the end the wisdom of that decision will be demonstrated.

Mr. Hooley: Will my right hon. Friend give a little more thought to this ministerial power of veto and overruling, which in the public mind can only diminish the status and authority of the Price Commission and call in question its responsibility in exercising its power?

Mr. Hattersley: My hon. Friend makes a strong point for the future. I am examining the possibility—I am not sure whether it is practical and legally possible—of ensuring in the new Price Commission Bill that when industries or companies are excluded there is some element of parliamentary control over that exclusion. If I can incorporate that in Committee, I shall certainly do so.

Mr. Neubert: But is not the Secretary of State failing in his prime responsibility to protect the consumer by allowing the imposition of a special tax on two out of three householders who use gas in order to offset its competitive advantage over other fuels and to keep the coal miners, with their poor productivity record, in business?

Mr. Hattersley: The hon. Gentleman sees these matters in too simple terms. We have always said—I think that this is agreed on both sides of the House—that the real way to combat inflation is to build a stable and expanding economy. The short-term measures we took to bring that about are in the interests of the consumer. That is why I supported them in December.

Price Display

Mrs. Wise: asked the Secretary of State for Prices and Consumer Protection if he will make a statement on his present policy of price display of goods and services, including unit pricing.

Mr. John Fraser: Price display can be an important aid to the consumer and encourage competition. We wish to encourage it more generally and intend to take statutory action to require it where appropriate. The Price Commission Bill accordingly provides for the extension of our powers so that orders could be made to require price display for any goods or services.

Mrs. Wise: Will my hon. Friend be a little more specific on unit pricing? Will he accept that, while they are no adequate substitute for a proper price freeze, clear price display and especially unit pricing are nevertheless helpful to consumers?

Mr. Fraser: I agree, but unit pricing is not always appropriate. Sometimes standardised quantities would be better. But we hope shortly to lay before Parliament orders covering virtually all sales of meat from butchers' shops and a wide variety of cheeses. Following initial consultation with trade organisations, a further draft order covering all sales of wet fish and competing prepacked frozen fish is being prepared. I shall certainly consider the case for other orders to be made as well.

Mr. Donald Stewart: What happened to all the surplus red triangles?

Mr. Kelley: Will my hon. Friend advise his right hon. Friend to move into the jungle in the retail outlets of motor fuel throughout the country, where petrol prices vary by as much as 12½p per gallon? Will he try to introduce some conformity in the way in which prices are displayed so that we do not have "9p off," "30-fold Green Shield stamps" and all that sort of thing? Will he move in heavily armed with the new powers which the Act will give him?

Mr. Fraser: I thank my hon. Friend. I have anticipated his pressure upon me, and only a few days ago I published a draft order for clear petrol price display at garages. I hope that that will have the support of the House and of the country.

Electric Plugs

Mr. McCrindle: asked the Secretary of State for Prices and Consumer Protection if he has received any recent representations regarding the proposal for an international standard system of 16-amp plugs.

Mr. John Fraser: Yes, Sir.

Mr. McCrindle: Can the Minister tell me whether acceptance of this international standard will require the rewiring of domestic and business premises? If so, over what sort of period are we likely to be able to absorb it, and what


will be the total cost? Has the Minister any estimate?

Mr. Fraser: May I make clear, first, that the Government have not taken a firm view on this issue, and I am glad to have representations from Members of Parliament on it. If the international standard were adopted, it would not require the rewiring of any premises. It would need to be implemented over a period of, perhaps, up to 60 years and would not, therefore, involve any additional cost. It would simply be swapping over to a new system with the rewiring or reconstruction of premises.

Mr. Fell: Does the hon. Gentleman really believe that this is a small matter? He shrugs it off as though it is of no significance. It is a matter of the greatest importance which will involve cost for every household. Does the hon. Gentleman know the cost of a plug now? This will cost every household many pounds. Will he, therefore, be very careful?

Mr. Fraser: I certainly take the matter seriously. Otherwise I should not have told the House that I do not yet take a view, and neither should I have told the House that I am anxious to hear representations from Members of Parliament. But adoption of the standard would not involve an obligation on anybody with existing wiring to rewire, and the two systems would exist alongside for a long time. Perhaps the hon. Gentleman would like to send me some more considered representations.

Mr. Stan Crowther: if my hon. Friend is seriously saying that this can conveniently be done over a period of 60 years, what on earth is the need to do it at all?

Mr. Fraser: I am putting forward the view of the International Standards Organisation, not my own view. There are certain advantages for British manufacturers in having international standards, and I shall want to consider that aspect of the matter along with representations by consumers.

Mr. Costain: Will the Minister reconsider his answer? As I understand it, he has just told the House that a 16-amp point would cost no more than a 13-amp point. Surely, that is crazy.

Mr. Fraser: I think that the hon. Gentleman must have misheard me. I said nothing of the sort.

Common Agricultural Policy

Mr. Biffen: asked the Secretary of State for Prices and Consumer Protection what estimate he has made of the likely percentage increase in total food prices during the current year as a consequence of EEC arrangements.

Mr. Hattersley: As my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 27th April, the outcome of the recent CAP price negotiations could add about ⅓ per cent. to average retail food prices in the year up to 1st April 1978. The two remaining transitional steps which we are committed to take under the Treaty of Accession will add about a further 1 per cent. to food prices in this period. The effect on the British consumer of the 2·9 per cent. green pound devaluation will be more than offset by the butter subsidy which we have negotiated.

Mr. Biffen: Is the right hon. Gentleman aware that, in the light of a falling trend of domestic food consumption, his words to the Federation of Young Farmers at Blackpool this weekend were particularly timely and his indictment of the common agricultural policy will be welcomed in many quarters of the House? Can the right hon. Gentleman further confirm that Commissioner Tugendhat has indicated that a Community scale system of food subsidies would bankrupt the Community budget, and can he therefore say that it is his view that the fundamental reform of the common agricultural policy which he seeks must turn upon the prices that are paid to agricultural producers themselves?

Mr. Hattersley: Yes, I agree with that exactly. Because of the differences between the amount of agricultural employment in one Community country and another, I do not believe that we could ever expect the Community to return to the sort of agricultural financing that we enjoyed in this country for so many years. What we ought to expect the Community to do is not to increase the support prices for commodities which are already in structural surplus. That I regard as a radical change, and I believe


that the House as a whole would regard it as a change for the better.

Mr. Madden: As previous attempts to secure fundamental changes in the Common Market's agricultural policy have failed lamentably, why does my right hon. Friend believe that present conditions are more favourable? As the accumulated cost of the Common Market to British housewives has been quite staggering since we joined, why does he not knock a few more holes in the CAP, let it sink gracefully, and let Britain withdraw?

Mr. Hattersley: One of the signs of hope is the success of the negotiations which my right hon. Friend the Minister of Agriculture had 10 days ago, when he obtained a deal which was better in British terms and better in terms of reforming the CAP than anything else that had happened during our period within the Community. My other hope stems from my belief that other members of the Community, particularly the industrialised countries of the Community, must sooner or later realise what a vested interest they have in reforming the CAP. Representatives of other Governments have already made speeches supporting that sort of view, and I believe that eventually common sense will prevail and the sort of reforms for which I hope will come about.

Mr. Body: Is the right hon. Gentle man aware that the figures he has just given are gross underestimates? For example, they have not taken into account the appalling burden on our meat producers of having to pay import levies on feeding stuffs, which now amount to £40 or £45 a ton, when the cost of feeding stuffs can amount to as much as 75 per cent. of the cost of meat production.

Mr. Hattersley: The point that the hon. Gentleman makes is open to dispute, but what is not open to dispute is that the analysis I have just given of the cost to the British consumer of the deal done 10 days ago is as I have described it. I do not think that any reputable authority would argue with those figures.

Consumer Safety

Dr. McDonald: asked the Secretary of State for Prices and Consumer Protection

if he proposes to publish a White Paper on consumer safety.

Mr. John Fraser: My Department is currently reviewing the suggestions set out in the consultative document entitled "Consumer Safety" published in February 1976, Cmnd. 6398, taking into account the many comments received. I hope to make firm proposals for new consumer safety legislation later this year, possibly by means of a White Paper.

Dr. McDonald: In view of public disquiet about the safety of some imported items such as toys and electric light bulbs, will the White Paper contain special reference to items of that kind?

Mr. Fraser: I do not think that it will contain special reference to those items where we have already acted with regulations for electrical goods, electric lamps and toys. What it will do is address itself to more effective methods of getting unsafe goods off the market or preventing them from appearing on the market in the first place.

Mr. Alexander W. Lyon: Since my right hon. Friend the Secretary of State sought to justify the increase in gas charges a little while ago by the need to reduce the borrowing requirement, and since the Treasury now admits that it had the estimate of the borrowing requirement wrong by £2,000 million, could the consumer now be protected against Treasury economists?

Consumer Advice Centres

Mr. Ward: asked the Secretary of State for Prices and Consumer Protection how many consumer advice centres are now open and being grant-aided by his Department.

Mr. John Fraser: Our present estimate is that there are about 120 centres, all of which will be grant-aided by my Department in 1977–78. I intend to announce further details about the grant scheme very shortly.

Mr. Ward: I congratulate my hon. Friend on this undoubtedly outstanding achievement of the Department in expanding the number of consumer advice centres, but will he guarantee that when he is discussing the financial arrangements in future with authorities being grant-aided, such as the London borough of


Havering, he will ensure that they are not just riding on the back of the Government and the taxpayer but are maintaining the quality of service which was established when the centres were first set up, usually by their Labour predecessors?

Mr. Fraser: I regret that some Conservative authorities have either disbanded centres or shown very much less enthusiasm for them. The way in which the centres are run and the initiatives to open them are for local decision, but I hope that all the centres which are now open will try to maintain their previously well-established high standards of service.

Sir David Renton: Is there not scope for the saving of public expenditure by getting the consumer advice centres, wherever possible, to join forces with the citizens' advice bureaux? I suggest that that would especially apply in the smaller towns.

Mr. Fraser: Of course, the consumer advice centres and CABs work closely together. I have been to one or two recently where they are both housed in the same building. It is not always easy to get a High Street shop consumer advice centre and combine it with a CAB. That must be a matter for local decision.

Mr. Swain: Is my hon. Friend aware that the main plank in the Conservative Party manifesto for the county elections on Thursday in Derbyshire is to do away with the consumer advice centres? Will he be prepared to make a Press statement tonight to tell the people of Derbyshire and the country what an excellent job consumer advice centres are doing on behalf of the people?

Mr. Fraser: I bitterly regret it if any local party or authority promises the electorate that it will close down consumer advice centres, particularly as during the course of this year the entire cost is covered by the central Government.

Mr. Freud: Will the Minister reconsider my earlier plea for travelling advice centres or centres at which telephone inquiries can be made and for advertising the information of advice centres in local papers? As the Minister well knows, people in rural constituencies need that sort of help very badly.

Mr. Fraser: I fully understand that people in remote rural areas are not readily able to find their way to a CAC and I am pleased to encourage schemes for freepost inquiries, telephone access to CACs, mobile advice and so on. Although we encourage and give aid, what is needed in any remote rural locality must be a matter for local decision.

Mr. Dykes: Will the Minister ensure that the staff of CACs are properly briefed and trained in giving proper advice on the real rate of interest applicable to personal and hire-purchase loans?

Mr. Fraser: Yes. The CACs should now have the consumer credit tables published by the Director General of Fair Trading. People I have spoken to have found them extremely useful in giving advice to the general public and to Traders.

Mr. Ioan Evans: I congratulate the Department on the way it has gone ahead, setting up advice centres that are deeply appreciated by consumers. However, will the Minister ensure that there is a feed back from the advice centres to the Government so that if there are numerous complaints on specific items of consumer protection the Government can take legislative action to deal with the problem?

Mr. Fraser: I regard CACs as being the eyes and ears of my Department When a pattern of complaints emerges, the facts are made available in my Department. Matters such as the petrol price display order have come about partially through the feelings expressed through CACs.

Brewing Industry

Mr. Adley: asked the Secretary of State for Prices and Consumer Protection what effect on future investment plans in the brewing industry he expects his inquiry into beer prices will have; and what consultations he has had with other Government Departments.

Mr. Hattersley: I would not expect investment plans to be significantly affected by the inquiry now being undertaken by the Price Commission. Before any reference is made to the Commission, it is the practice to undertake such consultations within Whitehall as may be appropriate.

Mr. Adley: Is not the Secretary of State aware that many brewers have expressed to me the view that his recent announcement on prices will have a substantial effect upon their investment plans? If he believes that there will be no effect, will he take urgent steps to talk to one or two brewers so that they may tell him how his announcement is having a direct effect upon the creation of more jobs in the brewing industry?

Mr. Hattersley: They may have said that to the hon. Gentleman, but that does not alter the fact that Allied Breweries is continuing with its £164 million investment programme over the next two years. I am advised that Courage, Whitbread, and Scottish and Newcastle are all building new breweries, or contemplating doing so, and there has been no indication that the Price Commission reference has changed their minds in any way.

Mr. Woodall: Is my right hon. Friend aware—and I know that he is—of the widespread concern expressed by the working men's clubs in my area at the massive profits being made, particularly by the brewery just mentioned, when the price of beer has been disproportionately increased?

Mr. Hattersley: I am very conscious of that. It was with that in mind that I made the reference to the Price Commission, whose report will, I hope, be with us in a month or two.

Capital Returns

Mr. Ridley: asked the Secretary of State for Prices and Consumer Protection what percentage return on capital employed he believes to be adequate profits for the purposes of Clause 2 of the Price Commission Bill.

Mr. Hattersley: The adequacy of the return on capital depends on many factors, including the cost of the capital, the business risk and the need for further investment, all of which vary from company to company. For this reason it is impossible to give a figure as an indication of adequate profits which applies generally throughout the economy.

Mr. Ridley: If the Government really believe in a profitable private sector, it is no good leaving it at that. Will the Minister tell the House whether he means

real profits, profits computed on the old, or on the new inflationary basis, and whether the profits that he thinks acceptable are adequate in terms of a percentage return? Otherwise he is relying on the gentlemen in Whitehall knowing best, which is the usual recipe for disaster.

Mr. Hattersley: I certainly mean profits calculated after proper allowance has been made for inflation. Without that allowance, the profits are a spurious and inflated figure. In future, however, we have to be less concerned with the level of profits and more concerned with their use. The new Price Commission Bill, against which the hon. Gentleman voted last Wednesday, is intended to help industry to choose to invest its profits in new plant and new machinery and to produce more jobs and better exports.

Mr. Ioan Evans: Does my right hon. Friend agree that investment has been encouraged by Government action to bring clown the minimum lending rate from 15 per cent. to 8¼ per cent., which is lower than it was when the Conservative Government left power?

Mr. Hattersley: It is substantially lower than when the Conservative Party left power. All the indications from the CBI survey, as well as from the Department of Trade investigations, suggest that investment will improve during this year. The substantial reductions in the minimum lending rate to which my hon. Friend referred will accelerate that process, which is central to economic recovery.

Mr. Speaker: Order. I have been advised during Question Time that the hon. Member for Rochester and Chatham (Mr. Bean) was in his place when Question No. 2 was called, but because of a hearing infirmity he was not aware that his Question had been reached. In these circumstances, and without setting precedents, I know that the House would expect me to call the hon. Gentleman.

Firework Injuries

Mr. Bean: asked the Secretary of State for Prices and Consumer Protection when he proposes to discuss the most recent firework injury statisics with the firework manufacturers.

Mr. John Fraser: I met representatives of the Firework Manufacturers' Guild on 21st April. The firework injury statistics for October-November 1976 were among the matters discussed.

Mr. Bean: The statistics are very encouraging, but there is no doubt that most of the injuries are still caused through bangers. Will my hon. Friend consider meeting the firework manufacturers again and discussing with them the possibility of prohibiting fireworks, or certainly bangers? In view of the forthcoming Silver Jubilee celebrations, is this not a matter of some urgency?

Mr. Fraser: I have already discussed bangers with the manufacturers. They reduced their production by 25 per cent. last year and propose to reduce it by at least 25 per cent. again this year. In June I shall discuss arrangements for 1978.
As for the Silver Jubilee, I understand from the firework manufacturers that it is unlikely that there will be any special demand for shop goods fireworks to celebrate the event. I think that to have another mini Guy Fawkes Day would be unfortunate in terms of historical precedent and also in terms of the number of small children who may be injured.

NORTHERN IRELAND

The Secretary of State for Northern Ireland (Mr. Roy Mason): I will, with permission, make a statement.
A body calling itself the United Ulster Action Council seeks to bring Northern Ireland to a standstill by calling for a stoppage of work from midnight tonight. Most of the militant Loyalist paramilitary organisations are associated with the Council whose membership includes the Ulster Workers Council, the newly formed United Ulster Unionist Party led by Mr. Baird, and the Democratic Unionist Party led by the hon. Member for Antrim, North (Rev. Ian Paisley). The Action Council is asking for the implementation of the majority report of the Constitutional Convention, which was rejected by this House a year ago. It is seeking confrontation with the Government and with Parliament. It is also asking for a different security policy.
I believe the proposed action would be economically disastrous for Northern Ireland, especially at a time when the Government have been giving special attention to the needs of the Province, where much has been done to help restore confidence. Such confidence is, of course, essential if much-needed foreign investment is to come to Northern Ireland. Only last week I was able to announce new orders worth £60 million to £70 million for Harland and Wolff.
The House must also remember that the disruption of the Northern Ireland economy is also the major aim of the Provisional IRA.
I am not in the least complacent about the present security situation. I can well appreciate the feelings of frustration in Northern Ireland that the community there has had to suffer so much for so long. But equally I am convinced that what the United Ulster Action Council is doing and proposes to do is not the way to improve matters. Indeed, a stoppage would distract the security forces from their efforts against the Provisional IRA, which has recently suffered reverses.
The Government will not be coerced. They will help the community to resist bullying tactics. The Government are supported in this by all the other political parties in Northern Ireland and by


the trade unions and employers' organisations, all of which have condemned the proposed stoppage.
The Government will deal firmly with any disruptive action that may be taken and will give full support to all efforts to keep industry and commerce in operation. There may be attempts by intimidation to prevent people from getting to work. This activity is clearly illegal and a matter for the police. The Chief Constable has informed me that the RUC will act against this and all other forms of illegal activity, invoking support from the Army if necessary. The GOC has called up all the Ulster Defence Regiment for full-time service in order to assist the Regular troops. The Spearhead Battalion and further reinforcements have arrived in the Province.
If there is disruption of public utilities, the Government will do everything possible to mitigate the hardship and inconvenience. As a last resort, specialist Service men are available to maintain minimum services essential to the life of the community and of individual citizens.
I hope, however, that common sense will prevail and that a small section in Northern Ireland will not try to inflict this pain and distress upon themselves and their fellow citizens. The House will, I know, join me and the majority of people in Northern Ireland in condemning those who seek to foment the proposed disruption.

Mr. Neave: Is the Secretary of State aware of our full support for the firm measures outlined in his statement? Will he keep the House informed of any new development and any other steps he may need to take to uphold the law in Northern Ireland?
Is he aware that we agree that this proposed action could bring ruin to the Northern Ireland economy, which is a major objective of the Provisional IRA? Would it not also hamper the security forces in stepping up their anti-terrorist operations?
Is the Secretary of State also aware that we share his hopes that this dreadful catastrophe will not fall on the Province? Does he appreciate that we shall be behind him if he takes strong action to prevent the bullying and intimidation of those who want to get to work?

Mr. Mason: I am much obliged to the hon. Member for Abingdon (Mr. Neave) for his support and that of his party. I will try to keep the House informed as matters progress.
What the hon. Gentleman says is true. The mere fact that this cloud is hanging over Northern Ireland's economy is bound to besmirch it once again in the eyes of the world and to make it difficult to attract investment to Northern Ireland.
The major point made by the hon. Gentleman concerned the diversion of the security forces from their main task. Because of this disruption they are being diverted from that task and their antiterrorist rôle will, to some extent, be affected.

Mr. Molyneaux: Does the Secretary of State agree that, even if 100 per cent. disruption resulted, the alleged objectives of the operation could in no way be achieved by such methods? Will he use every means at his disposal to alert the general public in Northern Ireland to the trap of being drawn into deliberately-organised confrontations with the security forces?

Mr. Mason: I am obliged to the hon. Gentleman. The public information services of the Northern Ireland Office are doing their utmost to inform the people that we shall do our utmost to keep the roads open and to encourage the people to go to work.
We have had encouraging support from every member of the major trade unions in Northern Ireland. All the trades councils have opposed the strike, as has the Northern Ireland Committee of the Irish Congress of Trade Unions. The shipyard workers intend to carry on. The power station workers have indicated that they intend to work normally as long as industries are carrying on and there is a need for generating capacity. We have given the people plenty of encouragement to go to work and to ignore the demands of the hon. Member's hon. Friend the Member for Antrim, North and his cohorts.

Mr. Mellish: Will my right hon. Friend express a view about the absence today from the House of the hon. Member for Antrim, North (Rev. Ian Paisley), who seems to be taking a leading part in


urging these men to strike in this most disgraceful way? Is it not his duty, as a Member of the House, to come here and explain the reasons for this action? Would my hon. Friend comment on that? Could he also find out whether this man, who is urging other people to strike, will draw his parliamentary salary during the process?

Mr. Mason: I make no comment on the latter point but, dealing with the former points, it is true that the hon. Member for Antrim, North is abdicating his responsibilities. He has said publicly in Northern Ireland that he does not want to come to the House of Commons any more and feels that, for him, and some of his hon Friends, it would be a charade if he attended.
I am sorry that the hon. Member for Antrim, North is embarking upon this operation. I think he is now feeling that he is being held in the grip of the paramilitaries who are tending to build up the atmosphere and to take over the rôles that Mr. Baird and the hon. Member for Antrim, North began.

Mr. Freud: Is the right hon. Gentleman aware that my right hon. and hon. Friends welcome the Secretary of State's statement, support his proposals and echo his wish that common sense may yet prevail in Northern Ireland? Will the Secretary of State accept that if this is a manifestation of loyalism, it would be interesting to know what would be the action of a traitor?

Mr. Mason: I hope that the hon. Gentleman will not take that too far. He will recognise that there are many Loyalist leaders, especially the leaders of every major Loyalist party in Northern Ireland, who have courageously stood up to and opposed this type of civil disruption and strike. It is true that one of the leaders of the Democratic Unionist Party himself has embarked on this. That is to his shame.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I propose to call the two hon. Members who have been attempting to catch my eye throughout.

Mr. Fitt: The presence in the House this afternoon of my right hon. Friend

the Prime Minister and the right hon. Lady the Leader of the Opposition should give an indication of the serious situation which exists in Northern Ireland. Can my right hon. Friend the Secretary of State tell the House whether, in his discussions this morning, he advised the hon. Member for Antrim, North (Rev. Ian Paisley) and Mr. Ernest Baird of the serious economic consequences of their present action, if pursued. Has he undertaken that, in the chaotic developments which must automatically follow, there will be no repetition of what happened in 1974, when social security benefits were paid to those who were on strike to bring about the downfall of the legally elected constitution? [HON. MEMBERS: "Oh".] This is a political strike. Does my right hon. Friend agree that what happened in 1974 was a political strike and that a political strike is planned now—against the wishes of this Parliament? Will my right hon. Friend also say whether a law is being broken at present in Northern Ireland? Is it a fact that some of those engaged in this strike are engaged in treasonable activities? Did the Secretary of State tell the hon. Member for Antrim, North that if he pursues his present course he is liable to be brought before the courts on criminal charges?

Mr. Mason: My hon. Friend raises three points. I did warn Mr. Baird and the hon. Member for Antrim, North that if this civil disruption begins at midnight tonight there would be serious economic consequences. I pointed out that today is not like 1974. The economy is in a weaker position. I said that it would be a blow which would make it very difficult for the economy to recover. I told them of the many things that Her Majesty's Government have done in recent months to support the economy of Northern Ireland, all of which would be in jeopardy.
The question of benefits is not of immediate concern. People will receive their benefits for this week. We shall have to consider, during the course of the week, to what extent we might pay—whether it might be an emergency benefit or whether we continue with the benefits as at the present time. That is under consideration.
Finally, I warned the hon. Member for Antrim, North that peaceful picketing is, of course, all right, but that picketing with the intention to intimidate would be an illegal act.

Mr. van Straubenzee: Following from the Secretary of State's last answer referring to intimidation—which, as he knows as well as anybody, can be exceedingly vicious in Northern Ireland—may I ask him to pay particular attention, without of course disclosing details, to certain groups of workers in Northern Ireland who, by necessity, work in small groups, sometimes individually, and who should be supported and helped at a time of intimidation because their continuing operation could be quite vital to his success in overcoming this threat?

Mr. Mason: Yes. I am fully aware of those to whom the hon. Gentleman refers. This problem of intimidation is extremely serious. It is evil and it can be penetrating. Many people—the leaders of religion, the Orange Order, trade unions, the CBI and political leaders—have all courageously stood up against the civil strife that may be upon them tomorrow. Because of intimidation that may be taking place, no one knows how things may develop. I thought it right to give the warning that if people are to picket with the intention of intimidation, that is an illegal act.

NEW MEMBERS

The following Members took and subscribed the Oath:

Austin Vernon Mitchell, Esq., for Grimsby.

Timothy John Smith, Esq., for Ashfield.

Orders of the Day — SUPPLY

>[15TH ALLOTTED DAY]—considered

Orders of the Day — CIVIL ESTIMATES, 1977–78

CLASS VI, VOTE 7, CENTRAL ADMINISTRATION (DEPARTMENT OF TRANSPORT).

Motion made, and Question proposed,
That a sum, not exceeding £15,614,000, he granted to Her Majesty out of the Consolidated Fund, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on 31st March 1978 for expenditure by the Department of Transport on central and other administration and certain other services.

Orders of the Day — TRANSPORT (RURAL AREAS)

3.47 p.m.

Mr. Norman Fowler: I beg to move,
That Subhead A1(1) (Salaries of Ministers) he reduced by £100.
I shall be brief, because I know that many of my hon. Friends wish to intervene in the debate, which is necessarily limited in time.
The context of the debate is the transport crisis in rural areas. If on nothing else, I hope that we all agree that the problems in country areas are both real and acute. For many people today the only way of travel is by car. The car has long ceased to be an optional luxury for many in Britain. Nowhere is that state of affairs more evident than in the rural areas. The number of households with cars in those areas is well above the national average, being 70 per cent. compared with the national average of 55 per cent.
The car is rightly regarded as an essential. All the surveys show this, the latest being that of the Automobile Association, which showed that in country areas no less than 78 per cent. of the working population, and 68 per cent. of the nonworking population, considered their car essential. The same survey showed that the vast majority needed a car to get to work.
The problems are not confined, however, to car owners. Many people, particularly the elderly and the young, who are without cars, must rely on other means of transport. The elderly in particular face difficulties in shopping and in making essential journeys, such as visits to the doctor, let alone in reaching places of entertainment. The fact that so many households have cars should not mask the problem of thousands of housewives who are left without the car during the day.
A problem exists, therefore, concerning both private and public transport. The Opposition's case against the Government is that over the past three and a half years they have ignored the problems and treated the people living in country areas with indifference. The Government have made the problems worse, both by deliberate acts of Government policy, and by omitting to act when such action could have helped tackle the problems.
Let us first take the position of the motorist. As the Government's consultation document shows, the car is the chief means of personal transport in Britain today, and the Government's own figures show that car ownership will rise steadily over the next 10 or 15 years. Yet over the last three and a half years the costs of motoring have increased vastly. Inflation, which the Government did nothing to control in their first years of office, has pushed up motoring costs. Running costs have shot up, and the Royal Automobile Club estimates that last year alone the cost of running the average small saloon rose by no less than £5 a week. So even before we consider motor tax, the fact is that the motorist is being required to pay considerably more just to keep his car on the road.
This position has now been made even more acute by the deliberate Government policy put forward in the Budget, and particularly the increase in petrol tax. It is interesting to look back to February 1974, when a leading spokesman of the Labour Party, the then Mr. Edward Short, said in Stockport about petrol tax:
A sensible Government who really wanted to restrain prices would reduce the tax".
So how does the Government's record stand up to that statement? Since 1974, petrol tax has not gone down; it has been doubled. Thus, as a deliberate act of

policy, the Government have added to the substantially increased costs of motoring.
But that is not all. When the Chancellor of the Exchequer announced this increase, he gave a number of reasons for increasing the tax, but he added this:
In addition there are reasons of transport policy for increasing taxation on the use of road vehicles".—[Official Report, 29th March 1977; Vol. 928, c. 272.]
When it comes to lorries, we know what those claimed reasons of transport policy are—the argument of track costs. But the Chancellor went further. He included all road vehicles.
So we ask the Secretary of State to make clear what he has so far failed to make clear—what are the reasons of transport policy which he is advancing? How does it mitigate the already acute transport problems in rural areas to increase even further the cost of motoring there? How does raising petrol tax help the tens of thousands of people who need their cars to get to work?
The Chancellor has pleaded that there are reasons of transport policy for this change. The time has come for the Secretary of State to say what they are. But on one point we can be sure. Not only does the Secretary of State share responsibility for the tax increases; he actually claims some credit for it.
At both General Elections in 1974, the Labour Party said on motoring that it would
develop public transport to make us less dependent upon the private car".
Whatever else we may disagree on, there is no serious disagreement that, over the last three and a half years, there has been no development of public transport in this country in rural areas or anywhere else. But the trouble is that the Government have pushed ahead with the second part of their policy and made the use of cars substantially more difficult for millions of people.
In the last Budget, the Government have developed that policy. Rather than choose a general increase in VAT as the Shadow Chancellor, my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), has suggested, they have chosen a specific measure which hits hard at people who already face specific and real difficulties.
But the electorate have already passed judgment on those Budget measures in a number of by-elections which have shown decisively the public rejection of the present Government's strategy. Later this week, in the local elections, I have no doubt that once again the public will give Labour the same message. Were it not for the Liberal Party, the whole nation could pass judgment on those policies and much else besides.
Over the last months, the Liberals have shown a mixture of timidity and inconsistency, to list two of their more attractive qualities. They appear to believe that they have influence when everyone else in the country realises that they are being taken for the biggest ride in both political and transport history.
I put this fact to the Liberals. If their words on petrol tax mean anything at all, they must mean that they will support this motion tonight. In particular, they will support it, I suggest, because petrol tax and the cost of motoring is only part of the case against the Government on rural transport.
The other part of the case against the Government is their failure to act to help those without cars and, in particular, their failure to act on the reform of the licensing system. Goodness knows, we have had enough Transport Ministers over the past three and a half years. We have had Secretaries of State, Ministers of Transport and Under-Secretaries, but one thing has remained constant throughout those changes—the Government's refusal to change the licensing system, and the present pair of Ministers must share that guilt with their predecessors.
The licensing system falls into two distinct parts—licensing to preserve safety standards, which, of course, we support; and licensing for permission to operate routes. It is that last part which is due—indeed, long overdue—for reform. It cannot be emphasised too often that the powers of licensing came directly from the 1928 Royal Commission on Transport. It is interesting to see that even then rural councils were the least enthusiastic about the proposed system. The powers were included in the Road Traffic Act 1930 when the then Minister of Transport, Herbert Morrison,

told the House of Commons that his aim was
a national and co-ordinated system of transport".—[Official Report, 18th February 1930; Vol. 235, c. 1221.]
That only goes to show how little Labour slogans have changed over the past half-century.
But what has changed is the conditions of transport. Over-provision of transport, which was one of the main problems that the 1928 Royal Commission had to deal with, is certainly not one of the major problems in rural areas today. Cross-subsidisation was one of the bases of the proposals—the support of unprofitable routes by profitable routes. That, again, is not the position today. Throughout these last 50 years the car has achieved its place as unquestionably the chief method of private transport in rural areas.
It is because of those changes that my right hon. Friend the Member for Yeovil (Mr. Peyton) proposed a relaxation of the licensing law and included the proposals in his 1973 Bill. They would have allowed car-sharing and the development of minibus services and they would have simplified the licensing procedure. On Second Reading of that Bill, the attack of the then Opposition spokesman on transport, the right hon. Member for Sheffield, Park (Mr. Mulley), was not that this was too revolutionary. The right hon. Gentleman said that he would have liked to see something more dramatic, while a Labour Back Bencher, the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael), said that he hoped there would not be too many pettifogging regulations about the use of minibuses.
But when the February 1974 General Election intervened, the Labour Government reintroduced the Bill themselves, but with this exception: they left out the three clauses on de-licensing. The Back Bencher who had argued for no pettifogging regulations was the junior Minister who argued against and rejected a proposal to put back the de-licensing proposals into the Bill.
Since then the Government have stonewalled. For two years they did absolutely nothing. A committee on rural transport was announced in November 1975. Such was the priority given to that committee that it took seven months before it had its first meeting. What has resulted from


that three and a half years' work?—a Bill to allow four small experimental areas. Even with their own Bill the Government could not find the time for debate on the Floor of the House. It had its Second Reading Upstairs in a Committee room, for one reason and one reason only: the Government said that they could not find time for it on the Floor of the House. Unless the Opposition agreed to that course, the Bill would fail altogether. Such, then, is the Government's record on this subject. In all conscience. I cannot see how even they can claim any credit for that. The prevailing view was put by the Government's transport spokesman in another place. She said that there is much to be said in favour of making haste slowly, and she added similar remarks to the same intent.
Nor is the Government party any better at the local level. I was astonished to see at the weekend that the Labour Party in my own county council area of the West Midlands is still saying that it wants free public transport. According to the local Press,
The Socialists will continue to push for free public transport if they have control of the county council at the close of the elections.
I hope that the Secretary of State will take the opportunity of this debate to dissociate himself publicly from that view, for the good reason, as he knows, as I know and as the House knows, that it raises hopes which simply cannot be realised.
As regards support, the problem today is to achieve the maximum value for the money which is spent. The trouble has been that national inflation has pushed up operating costs, leading to a mixture of both higher subsidies and higher fares, and, sadly, lower standards of service. But some Conservative councils, in spite of all the difficulties, have tried to improve the position, and the least we can do at the centre is not to stand in the way of such local initiative. After all, the local people know the local situation best. Yet what has happened?
I take the example of Oxfordshire County Council. The county council there has tried to do something to improve the position, and after long consultation it put forward an imaginative plan which both provided better services and saved

money. Part of its plan, however, required application to the traffic commissioners Application was made at the beginning of 1976. Finally, a hearing was arranged for June 1976. After two days the hearing was adjourned until July. After two days in July the hearing was adjourned until October. After two days in October the hearing was adjourned until November. After two days in November the hearing was adjourned until December. After four days in December it finally finished.
I say "finally" with the proviso that we still do not know, in May 1977, what the result of that application is. As a method of responding to local need, I should have thought that even hon. Members opposite might think that that process is slightly deficient.

Mr. Ian Gow: Is my hon. Friend able to tell the House what was the cost to the applicant and to the taxpayer of that protracted exercise in nonsense?

Mr. Fowler: Substantial. My hon. Friend brings me to my next point, the question of cost. It is not just a question of delay. As my hon. Friend accurately points out, there is also a question of cost. As my hon. Friend will have noticed, Ian Heggie, the head of the Transport Studies Unit at Oxford University, pointed out in the Economist this week that
a small private operator wishing to revise his service better to meet the needs of a small rural community, may have to spend a sum equal to the whole of his added first-year revenue…in order to get a licence from the traffic commissioners. Since innovation is an inherently risky business, it is clearly discouraged by this system.
I apologise to my hon. Friend that I cannot give him the exact figure, but what I am convinced of is the very point that Mr. Heggie is making, that the cost of this process stands in the way of the innovation that he and I both want.
One does not have to be an out-and-out revolutionary to believe that the position should be reformed. Yet what have the Government done to help? In three and a half years, the only policy initiative they have taken has been to arrange four experimental areas. With what purpose? According to the Under-Secretary the experiments will add


to the store of knowledge which the Government accumulate.
I put it to the Minister that it is not our store of knowledge which is deficient. Is is the willingness of the Government to take action. Indeed, the greatest action taken in this area has been taken not by the Government but by my hon. Friend the Member for Wirral (Mr. Hunt) in the Bill that he is currently putting through Parliament.
We have had surveys before. When my right hon. Friend the Member for Yeovil announced his proposed reforms, he did so in the light of two surveys. There was a survey in West Suffolk which showed the small part played by conventional public services there. There was a survey in Devon which showed and proposed that local private operators should be encouraged to provide those rural services which, by reason of their special circumstance, they can operate far more effectively. If this is not enough, there is other independent work on the same project.
We all know what are the options open to us—minibus services, car sharing, van sharing, post buses, the use of school transport for other purposes within rural areas. The National Association of Local Councils put the argument last year. It said that
there is an obvious absurdity in a public transport arrangement…which attempts to move adults, school children, goods, parcels and letters all by different means each of which is proving so expensive that the service which it is meant to underpin is being cut or abandoned.
I concede that not all services need a change in the licensing law. But what I must make clear is that we intend that the next Conservative Government will reform the present position. We shall want to retain the safety checking process, but we shall want changes in the law itself. These changes will be based on the 1973 Bill, but I do not promise that they will be confined to those alone. We shall certainly talk with interested parties about them, but we intend to have legislation on the statute book.
That option was open to the present Government, but they declined to take it. The Minister cannot hide behind the forthcoming White Paper. I have not mentioned for example, railway services in country areas, because that subject is probably better dealt with in the context

of the general review of railway policy. But on the petrol tax the Government have actually used their powers and acted against the interest of the people living in country areas. On licensing, they have failed to act at all.
Our aim will be to change the law to allow services to develop naturally in response to the different—and they will be different—needs of various local areas. The law should help local initiative; it should not hinder it. We shall reform the law to make this possible, and our aim will be quite simply to set the local people free.

4.9 p.m.

The Secretary of State for Transport (Mr. William Rodgers): You forbore, Mr. Speaker, to explain to the House the nature of the motion. Perhaps I may remind the House that it proposes to reduce my salary by £100. Although I greatly welcome this debate, I find the necessary procedural device distressing. Even in these hard times—we all know that they are hard times—it is unusual to be in danger of losing part of one's salary as the result of the vote of one's colleagues. That is pushing industrial democracy too far.
The issues we are discussing are very important. The hon. Member for Sutton Coldfield (Mr. Fowler) is right to draw attention to the special transport problems of rural areas. However, his choice of timing leaves me—I hope that he will forgive me for the evil thought—with the suspicion that it is not this issue but votes on Thursday which he primarily has in mind. So be it. But I should have preferred a rather more serious and considered approach.

Mr. Nicholas Fairbairn: Mr. Nicholas Fairbairn (Kinross and West Perthshire) rose—

Mr. Rodgers: If the hon. and learned Gentleman will allow me to finish at least two sentences consecutively, I shall give way. As the House knows, the Government's White Paper on transport will be published shortly. Despite what the hon. Member for Sutton Coldfield said this afternoon, that is surely the time to consider and form a view of our proposals for rural areas. They must be judged against the whole thrust and balance of the White Paper and not in isolation.

Mr. Fairbairn: The Labour Party deserves to lose votes to the Scottish nationalists tomorrow if the Secretary of State thinks that the country votes only on Thursday. Scotland votes tomorrow. Does he not know that?

Mr. Rodgers: What I do not understand is why the hon. and learned Gentleman is not there doing his best to win more votes for his party tomorrow. I regard it as a neglect of duty on his part not to show more enthusiasm for the cause which he espouses in Scotland.
Let us not seek to deceive ourselves or others that the Opposition are not playing games today. I acknowledge the hon. Gentleman's consistency, especially in relation to licensing. But in terms of record the Opposition have very little of which to be proud. Despite the urgency they profess to attach to legislation and despite all that the hon. Gentleman said this afternoon, they left nothing whatsoever on the statute book after three-and-a-half years in office.
I had supposed that remorse and the sobering experience of opposition had led them to believe that rural transport should have greater priority today. Alas, though I have scrutinised "The Right Approach" carefully—it was a tedious business which I have no intention of repeating—there is not a single reference to transport of any kind in this latest statement of Opposition policy. I do not believe that the public will be deceived by today's face-saving exercise. If the electorate is sick and tired of party politics, the Opposition are going a long way to confirm it in its disillusionment. The hon. Gentleman should be a little ashamed of himself.
The hon. Gentleman made a passionate speech on a motion of the Opposition's choosing. I had expected a packed Chamber and an enthusiastic response from the Opposition Benches. I count 20 Conservative Members present now. That is as much as they care for rural transport, a subject which they chose and which has a direct relationship to their own constituencies.

Mr. Geoffrey Johnson Smith: May I ask how many Labour Members are on the Benches behind the Secretary of State?

Mr. Rodgers: I made absolutely clear that this motion was chosen by the

Opposition and that it relates to constituencies which they represent far more than to constituencies represented by my hon. Friends.
I turn, then, to the counties that Tory Members represent. The hon. Member must know that many of the shire counties, where his party has majority control, have shown great indifference to the problems he has mentioned. They have certainly not championed public transport. On the contrary, they have even failed to spend money expressly accepted for bus revenue support. In Avon, Hampshire, Hertfordshire and Suffolk, for example, payments to bus operators have fallen significantly short of amounts I accepted for grant. In Kent and Gloucestershire councils have cut by more than one-third the claims for support from the National Bus Company. Oxfordshire—the hon. Gentleman chose to boast about it—is not paying any subsidy at all to the National Bus Company.
How can the hon. Gentleman claim that his party cares about rural transport when rural bus services are cut for the sole reason that Tory counties refuse to spend the money I have made available to them? Such a claim is poppycock.
I believe in a large measure of local option. Local authorities are best able to judge local problems and find solutions to them. But the record of many Tory county councils is deplorable, and there is no escape from that.

Mr. Peter Fry: Does the right hon. Gentleman agree that the way in which the rate support grant has been distributed recently—in favour of the metropolitan counties as opposed to the non-metropolitan counties—has thrown an enormous strain upon rural ratepayers, which is one of the reasons why the non-metropolitan counties have seen fit to try to restrain their public expenditure to a greater degree than Her Majesty's Government?

Mr. Rodgers: I am afraid that the hon. Gentleman has not grasped the point. I made sums of money available, as I was asked to do by the counties, but the counties did not spend that money for the purposes for which they asked for it. That is deplorable and I am surprised that the hon. Gentleman can possibly defend it. I accept restraints upon public expenditure, but these are specific


instances when money was there and the Tory county councils chose not to spend it.
I have referred to Oxfordshire, as the hon. Gentleman did. But if the House has had enough of Oxford, what about Cambridge, another county council controlled by the Tory Party?

Mr. Norman Fowler: Is the right hon. Gentleman really claiming that the transport system in Oxfordshire has not benefited very considerably as a result of the initiatives that have been taken there during the past few years? Is that not his responsibility, and the kind of measurement that he should be using at this stage? Does he know the situation in Oxfordshire?

Mr. Rodgers: I do. I have a copy of "Local Transport in Oxfordshire", a document published by the council, and I have studied it in great detail. The point that I was making is that the Tory-controlled Oxfordshire County Council has chosen not to make any grants or subsidy to the National Bus Company. That argument is beyond all peradventure and is without prejudice to the experiments being carried out by Oxfordshire, to which I may refer later in passing.

Several Hon. Members: Several Hon. Members rose—

Mr. Rodgers: I hope to give way again, but I have already given way several times, and if I follow Mr. Speaker's in junction, there will be a limit to how often I can do it.
The Tory election address for Thursday in Cambridgeshire says:
We will maintain the most essential bus services although bus subsidies will have to be reduced.
What does that mean? Cuts in services or increases in fares, or both? What will that do to public transport in rural areas?
The more we look at the facts, the more the whole idea of today's debate becomes disgraceful in the terms in which the hon. Gentleman has introduced it. The truth is that in many rural areas the Tory Party does not care a fig for public transport and never has.
The rural transport problem is simply this: greater distances and more scattered population make it harder for people to achieve and maintain even a minimum personal mobility. This causes hardship,

especially to the under-privileged but, to a lesser or greater extent, to all. It affects the quality of life. It raises costs and reduces benefits.
I do not intend to be drawn, although the hon. Member for Sutton Coldfield asked me to be, into a debate on petrol tax today.

Mr. Norman Fowler: What!

Mr. Rodgers: This subject was discussed in the Budget debate and on Second Reading of the Finance Bill a week ago. The time to consider it further is when the Finance Bill goes into Committee. I fully understand the genuine anxieties about its impact but this is not exclusive to rural areas. As for the price of petrol—another matter of concern to hon. Gentlemen—the Government realise that there are particular problems in some remote rural areas, especially where there are zoning arrangements and a monopoly supplier. However, I think that the House understands that there are real practical difficulties in finding a solution, although I shall, of course, listen to any new suggestions and be ready to discuss them with my colleagues.

Mr. Norman Fowler: Is the right hon. Gentleman serious? Does he not know that the motor car is the chief means of transport in rural areas? Does he not recollect what the Chancellor of the Exchequer said in his Budget speech—that there were reasons of transport policy for the increase in petrol tax? What are those reasons of transport policy?

Mr. Rodgers: If the hon. Gentleman will be a little less impatient, he will find that I am coming soon to his earlier question about the increase in the use of the private car.
Even if the hon. Gentleman does not agree, I think that there are many other issues of rural transport that ought to be discussed on this occasion. If I am to keep within the time limit, I shall have to devote my concern primarily to those issues, and not to an issue which has been raised in the House and which will be discussed again. I shall be happy to pursue the matter, if the hon. Gentleman so wishes, on a later occasion.
The problem of rural transport has been aggravated in recent years in two


significant ways. The hon. Gentleman may feel that this is all very funny and entertaining, but it is a serious matter for the rural areas. First, the tendency in planning has been towards centralisation and larger units. That has made travel more necessary—to work, to schools, to use services and amenities. There is a lesson here for all of us, especially for the planners, because we have taken too little account of the costs and inconvenience of travel. Biggest is not best if it means a day's journey to keep half an-hour's hospital appointment.
Secondly, there is the question of the growth of car ownership, to which the hon. Gentleman very fairly referred. This has tended to make those without a car worse off. I greatly welcome the extent to which more people are able to enjoy the freedom previously available only to a privileged minority who could afford private transport of its own.
There is, however, a "Catch 22" situation, especially in the countryside. As more people obtain a private car, the use of public transport declines and the cost in terms of passengers carried rises. This, in turn, pushes others into car ownership, even if they can barely afford it. It is a circle of frustration.
It is no answer to the problem, as the hon. Gentleman implied today, to abandon licensing in the rural areas and let private operators off the hook. An appreciable number of services are already provided by small operators in rural areas. They can and do get licences. A complete free-for-all would simply mean the unscrupulous plundering of existing services wherever there was a fast buck to be made. The public sector operators would go further into the red, fares would rise, services would be cut, and many people would be worse off than before. The only benefits of such a free-for-all would go into the pockets of a few, lucky individuals.
An effective solution, as the House must know, is a good deal more complicated. It must provide reasonable stability in meeting local needs, and proper coordination.
In fact, within the next five to 10 years rural transport could be transformed for the better. I regard this as a high priority for any Government. For this Government a fair deal for the rural areas will

remain a key item on our agenda. I agree with the hon. Gentleman that the rural areas have been neglected. That must change.
The solution is a basic network of conventional services, sustained where necessary by subsidies, but supplemented by a variety of unconventional means of transport, tailored to local needs and with adequate scope for self help. Both these elements are important—financial help and variety. One without the other will not do.
The hon. Gentleman chose to ridicule and despise the rural experiments that were announced by my Department on 24th March. But they deserve much more serious consideration, because the experiments in Devon, North Yorkshire, South-West Scotland and South-West Wales are important.
They will include flexible route services with pick-up on demand; a volunteer-driven community minibus, also with flexible routes; the use of shared hire-cars, providing feeder services to long distance bus and local rail services; the use of private cars authorised to charge fares; two hospital transport schemes; three new post bus services; and an emergency car service catering for unexpected and urgent needs.
Perhaps I could add here that I greatly welcome the growth in the use of post buses, which is a success story in rural transport. I understand that the 100th Scottish postbus route will be inaugurated this week. There are a further 25, most of them in the South-East of England, but I hope that there will be many more. They have my very full support.
The hon. Gentleman has complained about the delays in bringing forward the Bill for passenger vehicle experiments. I agree that its history has been chequered. I remind him and the House again, however, that between 1970 and 1974 his Government totally failed to get any legislation on the statute book, despite all the promises they made. Let us stop niggling about it. We want the experiments to go forwards as fast as possible so that we can learn from them and act upon them.
I also remind the hon. Gentleman that we have given full support to the hon. Member for Wirral (Mr. Hunt)—who, I believe, is not here today—with his Bill


to help schools and voluntary organisations. This, too, is a step in the right direction. Their minibuses will be authorised by a simplified system of permits in place of the complexities of public service vehicle licensing.
Beyond these minibuses run for particular groups, there is the need for more community buses run by local volunteer drivers to carry people on essential journeys in the absence of conventional bus services. I believe that these should remain within the jurisdiction of the traffic commissioners but they should be exempt from the need to obtain public service vehicle and driver licences. They will, of course, have to conform to certain essential safety requirements—the same as I shall be prescribing for the minibuses operated by voluntary bodies. In addition, I think that it is right to review the simplified licensing procedure brought in by Section 30 of the 1968 Transport Act to extend its coverage and enhance its usefulness.
In general, I believe that ways must be found by which the licensing system can be modified to leave more room for local initiative and decision and to ease the introduction of cost effective transport in rural areas within the means of ordinary people. With a White Paper due in only a few weeks' time, despite what the hon. Gentleman suggested, now is not the occasion to spell out every dot and comma. But a new charter for the rural areas in transport policy is my aim.
I have said that financial help is necessary for an effective public transport system. I deplore the neglect of those county councils that have fallen short both in planning for stability and in making subsidies available. This is unfair to passengers and unfair to the transport operators and all who work for them. I pay tribute to those who find their employment in the passenger transport industry. Their needs must be considered, too, because their livelihoods are at stake and many of them live in the very rural areas where they find their work. It would be quite wrong for the House to dismiss their natural anxieties when changes are occurring.
The best guarantee of a worthwhile future is in more stable arrangements between the counties and the bus companies, many of them subsidiaries of the National Bus Company. The Government

will play their part in ensuring the right climate and conditions for bus operations to achieve increased responsiveness to the needs of the travelling public and scope for the imaginative development of services. It is also essential that the trade unions should be brought fully into consultation with management and the counties in formulating plans and agreeing new arrangements. I greatly welcome their co-operation in the rural experiments and I am sure they will wish to play their part in making a real success of a new charter for the rural areas.
As for revenue support, I can tell the House that, within the total resources available for expenditure on transport, I hope to make increased provision for the rural areas. This will be of real practical help in maintaining bus services and avoiding the sort of fare increases that might otherwise occur. Again for my precise proposals—and I know the House would accept that this is in accordance with proper procedure on these matters—I must ask the House to await the publication of the White Paper.

Mr. Keith Stainton: Is the Secretary of State aware that many of the subsidiaries of the National Bus Company are currently in the process of withdrawing services?

Mr. Rodgers: Indeed I am aware of that. This causes me very great concern. The National Bus Company is withdrawing services in many cases, I regret to say, because the county councils have refused to support it and refused to make available to it the revenue support that I have given to the counties. I believe that the responsibility must lie with many of the counties. I take the hon. Gentleman's point. It is because I am concerned, despite the behaviour of certain counties over rural bus services, that I believe we should make financial provision for them to meet the problem to which the hon. Gentleman has fairly drawn attention.

Mr. William Hamilton: Will my right hon. Friend give the names of these counties?

Mr. Rodgers: My hon. Friend kindly suggests that I should do that, but the list is extremely long. I have mentioned some earlier and I think that caused a fair furore. I am quite willing to repeat them, but perhaps it would be kinder


to the counties to leave them to draw a veil over their nefarious failures on this subject.
As. hon. Members know, Mr. Speaker has asked that we should not speak too long today. I recognise that many hon. Members wish to talk about this subject. It is a very serious one and it should be discussed seriously. I should like to feel that the motion was by way of a probing amendment designed to allow the Government to reveal their thinking.
I should be happy if the hon. Member for Sutton Coldfield, having heard what I have had to say, which may have surprised him, saw fit to withdraw the motion. The hon. Gentleman may feel that that is the wisest thing to do. It is not for me to advise the Opposition, but they will hardly do themselves very much credit by voting against the policies that I have outlined. It would be far better for them to give a welcome to our new charter for the rural areas and to await the White Paper. The hon. Member for Sutton Coldfield may live to regret an adverse verdict tonight.

4.33 p.m.

Mr. Peter Temple-Morris: I am much obliged to be called so early in the debate. To a certain extent my credentials have been recognised for I have a constituency—I appreciate that other hon. Members have even larger constituencies—of 600 square miles. Within it there is one traffic light planned by a Conservative Government and triumphantly installed by a Labour Government. It is therefore a neutral traffic light. Apart from that my constituency is a wholly rural area.
As indeed will other hon. Members from this side of the House, I speak with a genuine concern for rural areas. Having that genuine concern I was not exactly delighted with the earlier parts of the Secretary of State's speech which I felt partly spoiled the genuine concern which the latter part revealed. To say that the Opposition are playing games by introducing the subject of rural transport at this particular time completely ignores the fact, which the Secretary of State and his colleagues know very well, that we have been raising the subject solidly in this House Question Time after Question Time. This is not the first debate

on rural transport this year. If we are playing games by introducing the subject this week, what on earth were the Government doing last week when giving development area status to the area which includes Grimsby?
This knockabout stuff does not get us anywhere. I would just add another point. I shall ignore "The Right Approach" save to say that I am pleased that it has caused such concern on the Labour Benches. I confess that I have not read the whole thing myself, but hon. Members, not least the Prime Minister and the Secretary of State, read nothing else. I can only believe from that that the Government are completely bereft of policies of their own and have nothing to do but comment on ours.
My hon. Friend the Member for Sutton Coldfield (Mr. Fowler) made an excellent and constructive speech in which he pledged legislation. That is far better than anything in any policy manual. The Secretary of State spent too much time talking about counties cutting subsidies—the villainous Conservative rural counties cutting subsidies to the National Bus Corporation which is making an ever-increasing loss. There is a genuine challenge to Government to give confidence to those county councils so that they do not do that.
My firm belief is that if the counties had confidence in the system, if the licensing system were a little more adaptable, and if their losses were not being compensated by ever-increasing cuts in the rural areas that they represent, and which they locally govern, they might perhaps be more inclined to subsidise the NBC instead of becoming ever increasingly less inclined to do so. There is a challenge here for whichever Government is in power.
I do not want to repeat anything that has been said already. I would just add a comment with regard to what the Secretary of State said in the latter part of his speech. He demonstrated concern for a subject which need not be partisan. That is why I regret the fact that we find it necessary to have a go at each other.
It is legitimate criticism that there has been delay. There were certain other preoccupations between 1970 and 1974, as the Secretary of State knows. But at


least legislation was introduced about two-thirds the way through that Parliament. It was lost by what happened in February 1974 and it was not reintroduced. What we have been dealing with since then is just one Bill, which was not even debated on Second Reading on the Floor of the House but went to some obscure room upstairs, to introduce four experiments.
It has taken a long time. There is a just criticism here. If the Secretary of State has the concern which he has shown since taking office, he must concede that it is not good enough that the Road Traffic Bill, which at the time was greeted by the right hon. Member for Sheffield, Park (Mr. Mulley), the then Shadow spokesman on the subject, was greeted without a vote against it at Second Reading. The right hon. Member in fact stated that he would take up details in Committee and we all had a reasonable hope that it would go through. But it did not. It was not until 3rd December 1975 that we even had an announcement about these experimental projects. We are now at the beginning of May 1977, and this Bill has percolated through the Committee Room upstairs. But the rural areas are not satisfied with the way in which they are being treated.
I would invite the House to see this problem in an overall rural perspective. My hon. Friend the Member for Wellingborough (Mr. Fry) referred today to the rate support grant. I do not want to divert the House from the subject at hand, but there is an ever-increasing feeling of deprivation in rural areas which runs through the agricultural spectrum—the problem over the Common Market, the green pound and the pig farmer. It runs through the cuts this year of rate support grant, which is seen as a continuation of something which has been happening over recent years, and finalises itself in the petrol tax increase. I appreciate that we shall be debating this subject subsequently but surely we are allowed to mention it here, because it has a certain relevance.
The problem in rural areas is compounded, certainly in my own area and no doubt in the rural areas of other hon. Members, by the cut price war which has been going on in urban areas and the cities. There are variations in the price of four star petrol of 10p and, in some cases, up to 14p. I see that one hon.

Member opposite—the hon. Member for Gloucestershire, West (Mr. Watkinson)—agrees with me. This is something which should be taken into account when transport and financial policies, or whatever, are chosen as comparatively easy superficial targets in the Chancellor's Budget.
I wish to address myself to certain specific points before I sit down. The one point to which we must address our minds with regard to this problem is the problem of co-ordinating rural transport. That was implicit in much of what the Secretary of State said. The first example of coordination concerns school buses. Section 30 of the 1968 Act allows them to take fare-paying passengers, so that one is over a certain amount of the hill. I appreciate that one can do a reasonable amount under the present licensing procedure, but in my own constituency it is too inflexible and absolute and there is far too much bureaucracy in the way of any local initiative or inventiveness. We need to utilise these buses throughout the day.
This has been referred to with regard to Oxfordshire. Indeed, other local authorities would like to do this. But it is always vigorously opposed by the NBC which obviously fears that a service will be provided which it cannot provide itself.
May I be allowed the luxury of saying that, as a former practising lawyer, I am distressed at the whole objection procedure adopted in the traffic commissioners' licensing procedures. The same goes for betting and gaming matters, and in the area of licensed victuallers. It is surely not satisfactory to object purely on grounds of self-interest or nihilism. It is a pity that this attitude applies to school buses.
I now turn to the subject of post buses. These have been particularly successful in the remoter areas of Scotland, whose very remoteness makes them suitable for the system of pick-up and collection. But there is certainly much room for improvement in the country areas of England and Wales.
We have tried to introduce a scheme in Leominster, but so far we have not been able to get a scheme going. The Government should be encouraging such schemes. We could not even find a postman to drive a bus during an experiment and that was one of the problems when


we tried to introduce the scheme. There was little encouragement from management or unions. As I have said in the House before, surely if men are to take on extra responsibilities they should be paid appropriately for the job. If postmen are also to act as bus drivers that factor should be taken into account, and in that effort to help the community the job should be made worth their while.
On the question of mini-buses, the Norfolk example is a good one since a voluntary element is involved. That scheme had been backed by the National Bus Company and should be carried further forward. Activities by car and taxi drivers are also to be encouraged in local transport matters. It is certainly a nonsense that these activities should be regarded as illegal, because they occur in any case. If they were encouraged, those activities would become more organised. The schemes could be advertised and the community could get together and the local garage owner could extend the schemes from mini-buses to a car-sharing schemes for hire and reward, and all the rest of it. There is much scope for widening these efforts.
It is extremely important that we should encourage self-help. I hope I shall not cast too much gloom on the proceedings if I say that, as matters now stand, many of the fancied topics for experiment are in danger of costing themselves out of the market. This is a complicated subject. The community will have to help itself in these matters. Communal car clubs and car pools within rural communities desperately require encouragement.
One of the parish councils in my constituency, North Bromyard, has a parish car. At the moment it is a pilot scheme and the Department of the Environment, through the traffic commissioners, has done all it can to help. The moral of that activity is that, despite the fact that the authorities have done all they can to help that parish council, it has had more and more red tape to cope with in trying to get that precious parish-council car in service. It is a four-seater family saloon driven for some years in the public good by a local and worthy gentleman. He was confronted with having to obtain a public service vehicle licence for the Austin 1800 saloon. There is then another obstacle

since the parish is required to obtain a public service vehicle operating licence. There has been a fusillade of objection by every possible pocket of self-interest among bus operators in the vicinity.
Finally and perhaps worst of all, let me add that that vehicle is intended to be used for getting local inhabitants to the nearest town for medical or shopping purposes, but difficulties have been put in the way of that service because of a fragile and inadequate service run on only two days a week by the National Bus Company. I am giving the House straight and pure fact, and hon. Members will know that I do not usually parade my constituency grievances. I am putting forward a valid example. Surely that is a matter to which a remedy should be found.
We must strive for greater flexibility in our licensing system. I feel that the way ahead lies in obtaining more information about the needs of the populace on routes in rural areas and then greater flexibility in meeting them. The way ahead points towards a licensing system run by the local authorities which, with the help of parish councils and their own experience, can identify need.
If the earlier legislation on this matter had gone through that would have contributed considerably by making "public need" the principle of licensing criteria. Chat is not happening at the moment, and if action were taken in this respect it would do a great deal to remedy the situation of which I am complaining.
The problems are clear and I echo the words of my hon. Friend the Member for Sutton Coldfield. The time for action has come, and it is desperately needed.

4.46 p.m.

Mr. Caerwyn E. Roderick: The hon. Member for Leominster (Mr. Temple-Morris) said that throughout the 600 square miles of his constituency he had one set of traffic lights. I must tell the hon. Gentleman that he has twice the density of traffic lights in his constituency that I have in mine. I have one set of traffic lights in 1,200 square miles of constituency. I do not know what that is meant to show in rural transport terms.
On the other hand, it may be significant in that my constituency possesses the highest number of car owners per head


throughout the population of Wales. This demonstrates the thinness of the population and the difficulties of rural transport. Only one railway line passes through the constituency, and public transport is at a premium and totally inadequate for the needs of our people.
The problems which are being advanced in this debate are not new, and they certainly did not arrive on the desk of my right hon. Friend the Secretary of State for the Environment when he assumed office. When railway lines have been lost in Wales—and I am sure that this applies to the whole of the United Kingdom—we have been promised replacement bus services. Those replacement services operate for three months or six months, but are then withdrawn or depleted. We do not trust any Minister who tells us that he will replace railway lines with bus services.
Those remarks do not apply to my right hon. Friend the present Secretary of State because he has not yet given any promises. However, if he tells me that he will retain the central Wales line, I would prefer that to any promise involving a replacement bus service because I know that such a service would not last. I wish to make a plea that the central Wales line is an essential artery for many people throughout Wales as well as for journeys from Shrewsbury. It is a socially necessary line, and I would ask my right hon. Friend to consider upgrading the line from a light railway to enable it to be brought into fuller use. It could then be used to transport people and commodities in a way that does not now happen. Perhaps my right hon. Friend could say whether he and his Department have considered widening the scope of the line.
I must tell the Secretary of State that buses in the two counties whose inhabitants I represent are almost non-existent. In view of the escalating costs of equipment, vehicles and spares, those buses are becoming expensive to run and people are becoming very concerned about the situation. Obviously there is a limit to the amount of assistance which the Government can give to local authorities in subsidising services, and counties and districts are closely examining the amount of assistance they can give and are limiting their expenditure.
Representations have been made to me by employees of the National Bus Company and others about the future of bus services. It is feared that many uneconomic routes will vanish or will be even further depleted.
The hon. Member for Sutton Coldfield (Mr. Fowler) waxed lyrical about changes in the licensing laws, but has he fully taken into account the effect of changes in the licensing laws on, for example, the National Bus Company? They might have a disastrous effect.
I know that my right hon. Friend commented that we should have a debate on petrol tax, and I know that we have the cheapest petrol in Europe. Nevertheless, increases such as we are experiencing in the cost of petrol and the tax on fuel have not been overtaken by wages in the rural areas. Wages are way behind those in urban areas. I believe that in certain pockets in Mid-Wales average wages are as much as £5 a week less than in some parts of the more urbanised areas.
Therefore, it is difficult to run a car, but it is an essential if a man is to get to work. It is often his only means of doing so. I do not understand how some of the families that I know support a car. It involves sacrifices on their part to obtain and run one. They are working for nothing, in effect, and are beginning to feel that the margin between what they would receive if they stayed at home and what they are paid at work is so small that it is hardy worth while. I ask my right hon. Friend to press my right hon. Friend the Chancellor of the Exchequer to consider the matter seriously. It may be that some of my constituents will rebel and say "Enough is enough. I do not think it worth while to do a full week's work for nothing", which is what we shall be expecting people to do if we are not careful.
A car is also the only means of getting around for social purposes in such areas, and not everyone has a car. Even though many of my constituents own one, there are still the problems of the family that is marooned when the husband has taken the car to work and the housewife cannot do her shopping. She has the additional burden of shopping in the most expensive way possible, not


being able to go to the competitive areas. Therefore, there is an urgent need to reconsider the whole question of petrol tax.
I have approached some of my right hon. and hon. Friends about the possibility of a differential form of income tax. Perhaps we might consider making certain allowances for travel to work against income tax. I understand that that would have its difficulties, because in effect we should be helping the much wealthier commuters of the South-East if we made the allowances widespread, but I hope that we can reconsider the matter. I should be prepared to face the unpopularity of making up the loss in revenue by increased taxation on alcoholic drinks. At least people have a choice when they spend money on such drinks, but they rarely have a choice when it comes to spending on petrol.
The hon. Member for Leominster mentioned the licensing laws. We have been worried in our area by the increasing use of part-time drivers by small operators. The National Bus Company has suffered considerably in failing to secure certain school contracts and other contracts. It cannot compete because it is paying proper wages to full-time personnel and the vehicles are being properly maintained.
The NBC tells me that many small operators are using drivers who are doing a full shift elsewhere and then earning a bit of pocket money. There are severe limitations on the driving hours of NBC drivers. A person who has done a full shift in any other job and then works as a driver is similar to the person who has done his quota of driving hours. The employment of such people is an unfair practice which has taken many of our public service vehicles off the roads and closed depots. It militates against an adequate public transport system.
It is all very well for a small operator to put in a tender for a school contract if that is all he is going to do, if he is not to put buses on the road for public transport services. This militates against what we need in our areas. It would be dangerous to review the licensing laws independently without considering all the ramifications.
I ask the hon. Member for Sutton Coldfield to consider, when he makes his

criticisms, whether he has been fair in looking at the Conservatives' public expenditure policy. I do not think that he mentioned subsidies to public transport. Would he cut that form of public expenditure or increase it? That is a fair question, as the hon. Gentleman is so critical of my right hon. Friend and of what is going on. I think that my right hon. Friend is proceeding along the right road. He would please me enormously if he could twist the Chancellor's arm.

4.56 p.m.

Mr. David Penhaligon: I have a suspicion that the main reason for the subject of rural transport being chosen for the debate is not that there is great anxiety on the Conservative Benches about rural transport but that it is seen as an opportunity to put me and my colleagues on the spot. The Minister is in real danger tonight of losing £100 of his salary, because we shall be going into the Lobby with the official Opposition.

Mrs. Elaine Kellett-Bowman: About time too.

Mr. Penhaligon: Despite the efforts that have been made, the Government do not understand the transport difficulties in rural areas. The real problem is over travel to work. I often quote St. Mawes in my constituency, a rural area, where there are six Rolls-Royces. I cannot believe that the owners have great trouble running their cars. Another 5p a gallon on the price of petrol will make no difference to them. But in the same village there a hundred or so of my constituents who commute from St. Mawes to Truro to work, in an area with even lower wages than Mid-Wales—£40–£50 a week. For them, the difference between the money they receive for working and what they would receive if they stayed at home has become so small that many of them no longer regard it as worth the effort. It is those people that I feel so strongly about.
I believe that it would be possible to produce a definition of travel to work where public transport is not available so that the expenses could be allowed against income for income tax purposes. I know that it would be administratively difficult, but I cannot believe that it is not possible. My hon. Friends and I


are referring particularly to the people in areas where, in effect, there is no public transport.
There is no point in hon. Members denying that there is a good argument on conservation grounds for gradually, over a decade, screwing the price of petrol up and up. Those who will not recognise the argument will find in about 20 years' time—I expect still to be on this planet then—that we have virtually no petrol. There will be no point then in talking about the price.
We have a terrible tendency to produce a cars policy to fit British Leyland, not logic. I believe that our right policy is to announce to the car industry as a whole that we shall be introducing a Road Fund licence which applies viciously to the cars that use the most petrol. To introduce it tomorrow would only be an enormous encouragement to imported cars, because—whatever the strengths and weaknesses of the British car industry—at the low end of the market, the petrol economy end, it is pathetically weak, producing only the 15-year-old Mini.
I do not believe that the problems are insurmountable. In many rural areas the car is an essential part of transport, and for those who wish to earn a living it will long be so.
Buses have received substantial attention today. I recognise the Government's treatment of buses and bus services. It is all very well for the Conservative Opposition to make their criticism, but without the subsidies that have been directed to bus services in constituencies and counties such as mine most of the bus services would by now be in shreds.
It was the theory that if we gave the bus companies licensing powers the profitable routes would pay for the less profitable. In Cornwall there are 89 routes, and only three run at a profit. One route makes £12,000, another £600 and another £800. The route that makes £12,000 would have an enormous amount to do if it were to be responsible for equalisation throughout Cornwall. Clearly that is not possible.
When visiting rural areas, it is impressive to meet elderly people of 80 years of age, for example, still living in the villages where they were born and brought up. It is interesting to listen to their

experience of the technical revolution. When they were children they used to go to the local town by horse and cart, whereas now they have to walk. That is their experience of 60 years or 70 years of technology. My Liberal colleagues and I find that totally unacceptable.
In many areas the bus services have only three categories of customer—namely, the elderly, schoolchildren and the ever-diminishing number of people who are unable to drive. However, there will never be a time when everyone can drive. Indeed, I doubt whether that is a desirable objective.
The fact is that buses have become unbelievably expensive. In my area the cost of travelling a mile by bus costs about 6½ or 7p. That is common in many rural areas. On the occasions when I use the buses in London, I always ask the conductor to tell me when to get off the bus. I pay only 6p, and we seem to go on and on and on.
Nothing irritates me more than to hear the people of London complaining about the cost of transport. They have no experience of what expensive transport means. Even where expensive transport exists in rural areas, it is tragically inadequate. Often the last bus leaves at 8.30 p.m. The young man courting his girl friend has no great wish to finish whatever relationship he is managing to create at 8.30 in the evening in order to get home. That is the sort of pressure that makes a young man get a motor bike or motor car at 17 or 18 years of age and stop using public transport. If he does so, that is another customer lost. The other problem is that in many areas public transport is non-existent.
The ending of licensing has been offered as the great solution to our problems in rural areas, but there are places in my constituency, as in the constituency of the hon. Member for Bodmin (Mr. Hicks), where there are no buses. I know that that is the position in other areas. There is no licensing control in some areas, and anyone who wished to run a bus from Truro to St. Mawes, for example, would be welcome. If it were of some assistance. I should pay the first fare. The truth is that, given the normal laws of economics, it is no longer possible to run a conventional bus service between Truro and St. Mmes.
The House must encourage traffic experimentation. I wish that the experiments were to be applied in a far wider area. I wish that local councils could initiate experiments in their areas much more easily. That is one of the matters that I raised in an earlier debate. Decision-making must be directed to the areas concerned. Westminster will never understand the difficulties of rural transport. There are some county councils that do not seem to recognise the difficulties, but we can yell and shout at them because they are in the areas where the decisions are to be made.
A factor that causes much of the trouble is the asinine idea that we can solve all the problems in various areas by over-increasing centralisation. There is the idea, for example, that the education committee can save a few thousand pounds a year by amalagamating three or four primary schools. The enormous increase in the cost of transport seems to be totally ignored. Only 400,000 people live in Cornwall, yet the county spends £1 million a year on carrying children to school. Everyone knows that it will be about £1½ million next year, or perhaps even more than that.
In reality there is only one major hospital in Cornwall—namely, at Truro. The other end of the county is serviced by Plymouth. The centralisation of the hospital services continues. It is true that the Government are, so to speak, holding the dam, but there is the feeling that the day will come when the process will be allowed to continue.
As a result of the difficulties that are now being faced by the hospital boards, it seems that there is a scheme in existence that will have the result of cutting the expenditure of the hospital car service to one-third of its present level. What effect will such a scheme have in reducing waiting lists if only one-third of the cars are to be provided to carry my constituents and the constituents of the hon. Member for Bodmin to the local hospital? If the cut is made, most of them will die on the walk to the hospital. Cornwall is providing the service at a cost of about £600,000 a year.
I was recently assured by the regional manager of British Rail that the local train service in Cornwall accounts for El million a year. That means that we

are spending £1 million on taking children to school, £600,000 or £700,000 on the hospital car service, £1 million on subsidising the local train service and £500,000 on subsidising the local buses. The net result of that enormous expenditure is that we have a miserable, pathetic local transport system. I cannot believe that there is not enough wisdom in the world to use the money on a far more intelligent basis.
There is a lack of co-ordination. There needs to be real action to bring about proper co-ordination. At the same time, there is unpreparedness on the part of the Government—we always live in hope—to concede the 5½p-on-petrol argument before they are bashed in the elections.
When tonight's Division takes place, we shall be voting for the Opposition. That is not because we have enormous faith in the solutions that they put forward but because we believe that the Government have demonstrated that on this issue they do not understand the problems and the consequences that are having to be faced by ordinary working constituents.

5.8 p.m.

Mr. George Thompson: I was glad to hear the Secretary of State say that he recognises the folly of ever-increasing centralisation, a matter that has been mentioned by the hon. Member for Truro (Mr. Penhaligon). In reaching his conclusion I wonder whether the right hon. Gentleman spent some of his time considering various documents issued by the Scottish National Party?
I am amazed by the hospital centralisation in my constituency. So many cases from the extreme west of the constituency have to go to Dumfries yet Dumfries now sends food supplies to the hospital at Stranraer, which is in the opposite direction. This seems to be an odd way of behaving, especially as it means that the suppliers in Stranraer, who had previously supplied the hospital for many years, no longer have this source of orders.
Like the hon. Member for Leominster (Mr. Temple-Morris), I pay tribute to the post buses. They have fulfilled an important rôle in the more neglected areas of my constituency. On Saturday I was in the village of New Luce, which for some years had the privilege of having no bus service. The railway line passes


close to the village but the station has been closed. It could not be said that British Rail exceeds any speed records between Girvan and Stranraer. Surely the trains could have continued to stop at New Luce without endangering connections with the Irish passenger boats.
The trouble with post buses is that while they are of great use to housewives and patients travelling to see their doctors, for example, they provide no services in the evening. Therefore, young people have to take to motor cars or motor bicycles. That brings the problem that those who want to go out in the evening for a drink are obliged to travel by car. They have to use their cars for social activities.
I can see some difficulty, at least in my region, in using school buses to supplement the transport system. Often, the drivers serve as assistant janitors or groundsmen during the school day. However, I am sure that other arrangements could be made.
I am speaking as a rural dweller in what Governments are pleased to think of as a remote area. In fact, Galloway is almost in the centre of this island, but we are remote from London of course and to some extent from Edinburgh. Yet we are an important area, serving as an international link.
I also speak as one who, up to 14 months ago, had depended all his life on public transport. I suppose that if I had not been elected to this honourable House, I might never have been forced on to the road as a car driver. I use a small car, not just to save petrol but because I still believe that it is the only car that I can park without running into a car on either side.
I have been wondering how far into the future the long-term planning of transport goes. I was impelled into this thought recently by attending a small conference organised by the Scottish Association for Public Transport and the Stewartry Council for Social Service in Stranraer about the feasibility of reopening the railway line between that town and Dumfries.
It struck me that one thing which had not been taken on board by our transport planners was the enormous development of forestry in Scotland, at least on the hills. I wonder whether the Department

has thought about the immense amount of timber which will be coming from the forests, even in Galloway alone. I am told that by the year 2030 it will be 1 million tons a year. The supply of timber is perhaps a trickle at the moment, but it will become a spate by the end of the century.
I suppose that any question about the energy crisis will meet the answer that we must await the White Paper. There have been so many good trailers for the White Paper that my excitement at its imminent arrival increases with every word that the Secretary of State utters. What longer-term projections has the Department made? What plans does it have if the scientists do not come up with a new, fast, cheap propellant for the motor vehicle? I suppose that everybody will have to follow my example and move over to the small car.
The hon. Member for Leominster mentioned the importance of co-ordination. What infuriates me as one who has always used public transport is the lack of coordination between railways and buses. When I spent a year teaching Brittany I was surprised, after my experience in Dumfries, by the fact that one did not have to go from the railway station to the bus station to get a bus to any of the rural areas. Every bus from the bus station went to the railway station to pick up passengers. It is only in recent years that that has happened to some extent in Dumfries. I am sure that the picture is the same in other small towns in Scotland. It is important that the bus companies and the railways link up.
For instance, this morning I had to get up 10 minutes earlier because the Glasgow-London train through Dumfries is now scheduled to leave Dumfries 10 minutes earlier. So at least it would have done, had it been on time. But I do not want to make snide remarks about British Rail. The driver nearly caught up; although we were 35 minutes late leaving Dumfries, we were only 10 minutes late at Euston. I pay tribute to that, but not to the heating system, which for most of the journey did not appear to be functioning.
Is British Rail interested simply in inter-city transport, or does it consider the humbler rural dwellers who want to join trains en route? Did British Rail


consult the bus company to see whether the bus from Kirkcudbright would arrive at Dumfries station in time for passengers to catch the train? It will be interesting to inquire more deeply into that next weekend.
I could give many more examples. For one, there is a bus from Newton Stewart to Glasgow which arrives at Barrhill just as the train leaves the station, when a journey of a quarter of a mile up the road and back again would link with the train.
On the subject of integration, how will it be possible for a Scottish Assembly to deal with transport properly if British Rail does not come within its jurisdiction? We must not have the sort of limping system that we have now, with someone responsible for one area of transport and someone else for another.
I said that we are told that in our area there is a Euro-route. That is said when people want to flatter us, but when it comes to spending money, those with the money seem to regard it as an unimportant trunk route from Gretna to Stranraer. I am talking, of course, of our old friend the A75. The Under-Secretary of State for Scotland will know that I have made numerous interventions about this neglected highway. Perhaps he saw in The Guardian recently an article about the problems in Glenluce. It was an excellent article, which should have made the Scottish Office fully aware of the state of affairs in Glenluce, but so far as I can see, the only result so far has been a number of cancellations of hotel bookings in the village because people read of the horror of living in a village on the A75.
Would it not be possible for the regional councils to allocate some of the money that they spend on minor roads to improving trunk roads if the Scottish Office does not have enough money to do so? I can think of a few places where regional councils could do this if it were permitted.
There are many discrepancies between one region and another in concessionary fares. A wealthy area like Strathclyde can provide a very good service for pensioners, but a sparsely populated one like Dumfries and Galloway cannot. Thus, if a pensioner travels from my village to Ayr, at Dalmellington he will see people getting on the bus paying much lower

concessionary fares than he pays under the token scheme.
Is it not time to allow school pupils half fares up to the age of 16, instead of the present frequent disputes about age?
In view of the number of hon. Members who wish to speak, all I will say about what the hon. Member for Brecon and Radnor (Mr. Roderick) said about taxation is that I back him all along the line. The Government should be putting pressure on people in the cities not to travel around in motor cars instead of allowing them to get cheap petrol to do so. Surely some of the people whom I see floating around the City of London every morning as I walk from my lodgings would benefit from walking to their offices, restaurants and so forth. As my party's spokesman on health, I commend the idea.
My party awaits the White Paper with great interest and I await it even with excitement. We shall subject it to the closest scrutiny, so it had better be good. However, in view of what happened on the Devolution Bill, we feel that it is necessary to administer a stimulus to the Secretary of State and that a slight diminution of his salary would be an excellent stimulus to ensure that all the excellent ideas that he has put to us today will actually appear in the White Paper. That is why we shall administer the stimulus to him tonight.

5.20 p.m.

Mr. John Watkinson: I hope that the hon. Member for Galloway (Mr. Thompson) will forgive me if I do not follow him on his personal travelling arrangements. I wish to echo a chord that the Secretary of State struck in his balanced speech at the beginning of the debate as opposed to the blatant electioneering shown by the Opposition spokesman.
My theme has been taken up by every speaker—it is the problem of centralisation and the difficulties to which it has given rise to in rural areas. Indeed, in Gloucestershire there were proposals to shift the offices of the Department of Health and Social Security to the other side of Gloucester which would have meant some of my constituents literally travelling all day if they wanted to go to their local office. I am delighted to say that the Government rejected this proposal.
If my right hon. Friend learns nothing else from the debate he will learn that there is a strong feeling in the House that although there is—perhaps rightly—a concentration on the cities and their problems, there is also considerable rural deprivation. The hon. Member for Leominster (Mr. Temple-Morris) referred to this. In the same context, my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) referred to the effect of petrol tax increases. It would be inappropriate if I did not also refer to those increases.
As my hon. Friend so eloquently pointed out, the increases will have a significant impact on people living in rural areas. My hon. Friend emphasised—as did the hon. Member for Truro (Mr. Penhaligon)—that the effects of the increased tax on people travelling to work in rural areas, such as those that we represent, are fundamental. I absolutely back up my hon. Friend on that point. Such people basically rely on cars as their means of transport to work.
The hon. Member for Brecon and Radnor referred to the possibility of a differential tax system on petrol. The hon. Member for Leominster pointed out that such a tax already operates because petrol is more expensive in rural areas than in urban areas—so it is operating in the reverse way to that which we should like to see. Just as petrol costs more in the country so do many other things cost more for the people who live there. In particular, food prices are higher. This all adds to the difficulties that exist in rural areas.
I am sure that all hon. Members would concede that a balanced view shows that rural transport problems have not emerged suddenly since this Government came to power. We all know that there has been a decline in the use of bus services, not just during the last three years but during the last decade. The net result has been a downward spiralling of the public sector transport available. I doubt that it would come as a surprise to the Government to learn that some of my constituents are deeply concerned about the high price of transport in their areas, particularly on the buses.
I can go so far as to say that elected representatives in my county concede that transport problems are of the utmost importance and place them second in the

list of the serious problems that now confront Gloucestershire County Council. Yet, as my right hon. Friend indicated, Gloucestershire County Council has shown itself to be less than keen in availing itself of all the resources that are available for the provision of rural transport. The Secretary of State referred to the fact that the county council has cut back a claim for support.
Indeed, as my hon. Friend the Member for Gateshead, West (Mr. Horam) has pointed out, the Labour Government have made funds available to assist public transport in rural areas. He has said that in the supplementary grant for the coming year all claims have been met, but my county did not ask the Department for enough. The funds were there but they were not requested. It is for that reason that I criticise Gloucestershire County Council.
In the area of the Forest of Dean, the Red and White Bus Company will run at a loss of £135,000 next year—yet the company has been offered only £60,000 by the county. This can mean only that services in my area will be cut in circumstances in which the county could have asked the Government for more money. Indeed, the county council's record is singularly poor in this matter. The county ranks fifth from bottom in the list of all counties in the country in terms of support per capita for transport.
Gloucestershire County Council has a poor record in not only transport but road maintenance. The burden has been made heavier by the de-trunking of roads in the county. That means that the county council will be under even greater pressure—and expenditure on road maintenance is already extremely low.
I wish to refer to one or two points that have been made by the Opposition. Remarks have been made about school transport. This is an issue that causes endless difficulties in my constituency. Whilst it might be possible for the Secretary of State to shrug this off on to the Department of Education and Science, nevertheless, as my right hon. Friend well knows, the traffic commissioners play a key rôle in this area.
Some of my constituents can watch contract buses, taking children to school, passing their doorsteps. The buses have seats available that their children could


use, except that they are not allowed to do so, because, according to the provisions of the Education (Miscellaneous Provisions) Act, the road traffic commissioners cannot allow this when a public transport service exists in the area. As a result, school children in my area must go to school in a way that is more expensive than is absolutely necessary. This is a crazy situation and one which, as the chief education officer in my area has said, is absolutely baffling—not only to parents but to many hon. Members.
I also echo the remarks that were made by the hon. Member for Galloway when he referred to concessionary bus fares. This is a significant way in which we can increase and improve the mobility of the old in rural areas. I am sure that every hon. Member can tell stories of the tremendous financial difficulties faced by old people in getting about. It would be helpful if more money were available for concessionary fares but, perhaps more important, it would also be helpful if there was at least common treatment—at least within counties. In Gloucester some district authorities give concessionary fares and some do not. I should like to see the same treatment for all and a common level of concessionary fares so that pensioners could not complain about more advantages being available in one area than in another.
I am sure that the Government are aware that, as has been pointed out, there are severe problems that must be tackled and they must be tackled in a flexible manner. In my area the cost of running a public bus service on approximately the same route as private bus services is nearly three times higher. I know that the National Bus Company operates over a wider area than the private services and therefore has much higher overheads than the private operators; but this is a perfect example of what one could call the "Laker syndrome" when these private operators can get on to the highly profitable bus routes and can operate much more cheaply than the National Bus Company.
Perhaps it is time to look at the costs of the National Bus Company, to identify the routes on which it can compete with private companies at their rates and to subsidise more heavily the distant outlying

areas that must have public transport. There is scope for further investigation here.
In general, I support the Government's proposals for a much more flexible approach to public transport in rural areas. I do not know whether we have fully tested whether a reduction of bus fares would bring people back to public transport, but I am highly sceptical about that. I was talking recently to one of the managers of my local bus company and his experience was that in areas where this had been tried, there was not a vast increase in the numbers of people using the buses.
I suspect that, because of the number of cars in rural areas and the fact that people find them so convenient, it is unlikely that there is a vast reservoir of people waiting to jump on to public transport. However, that does not mean that we should not provide public transport. We should do so on a flexible basis.
I welcome the stand taken by the local authority in South Yorkshire that has said boldly that transport is a fundamental and basic social service, and that it will ask ratepayers to subsidise that service. I support that fine attitude.
My right hon. Friend suggested that we would have a viable rural transport system in five or 10 years. I hope that he has his eyes firmly fixed on the lower, rather than the higher, figure.

5.32 p.m.

Mr. Richard Luce: The main message in the speech of the hon. Member for Gloucestershire, West (Mr. Watkinson) was that greater flexibility is needed in relation to the law and rural transport. I thoroughly agree with him. That has been the cry for several years. The main burden of our criticism is that the Government should have grasped the problem much earlier.
Rural transport provides us with a precise example of where legislation could be introduced that would be of useful and practical effect and of benefit to the people in rural areas—as opposed to much of the legislation of recent years, that has had the opposite effect on many of our people.
We have a wrong sense of priorities in this Chamber if we have left it this long


before introducing even minor legislation to deal with the problem. We are faced with licensing laws and petty regulations that hold back the prospect of improvement in rural transport and that stifle experiment, innovation and enterprise. That is what is wrong with the present system.
My hon. Friend the Member for Sutton Coldfield (Mr. Fowler) has described vividly and well the steady deterioration in rural transport in the 1970s and the fact that it has become a major social problem. He and the Secretary of State have described how fares and costs have both gone up and how, almost by force of circumstances, car ownership has increased in rural areas and the number of passengers in public transport has declined. There has been a vicious circle and it will be exacerbated unless something is done about this major social problem.
Car ownership in rural areas is higher than average. About 70 per cent. of people living in rural areas own a car but the 30 per cent. who do not are far more isolated than the people without cars in cities and towns. They are often elderly and handicapped people who find it difficult to get to hospital or to the doctor or to their shopping and carry out their normal daily activities.
Of the 70 per cent. who own cars, many have bought them of necessity because the cost and difficulty of getting to work has increased so much in recent years. They have had to buy a car, but now they find themselves clobbered by a doubling of petrol tax in the space of three years and a doubling of the vehicle excise duty in two years. This has also become a major problem.
We have needed for a long time a comprehensive approach to the difficulties of rural transport instead of a tinkering with the problem. The different aspects of the problem in different parts of the country must be considered and interrelated.
The Secretary of State implied that the Opposition were having a bit of fun today and were not genuinely concerned with the problems of rural transport. I remind him that in 1973 my right hon. Friend the Member for Yeovil (Mr. Peyton) introduced the Road Traffic Bill that was designed to deal with the problem on a comprehensive basis. That was lost only because of the 1974 General Election.
I introduced a Bill under the Ten Minutes Rule to ease the problem of rural transport and to sanction the use of minibuses for voluntary organisations. One of the reasons that the Bill did not get through was that the Government did their best to stop it. Indeed, I believe that it was only because of the overwhelming pressure from voluntary organisations that my hon. Friend the Member for Wirral (Mr. Hunt) was successful with his excellent Bill to help voluntary bodies.
We need a comprehensive approach in the White Paper and a decision that licensing laws must be relaxed to allow innovation and enterprise while ensuring, of course, that safety standards are maintained at the highest level.
In order to illustrate the importance of interrelating the difficulties and problems in the White Paper, I should like to identify five important areas. First, there is the straightforward problem of rural bus services that are diminishing at present. We need not merely a Bill that tinkers with the problem but legislation to relax the licensing laws and to enable county councils to experiment with private enterprise and mini-buses. The problem is too desperate to allow only experiments in Devon, Yorkshire, Scotland and Wales that will take two years to produce any conclusions. The situation will have got much worse in that time.
The second problem is faced by commuters who are finding it increasingly difficult to get to work. The people of Brighton tried to find a cheaper way of getting to their jobs in London. They wanted to run a coach service, but the traffic commissioners put up all sorts of objections and obstacles. This is an obvious area where the law needs to be relaxed. When people share private cars, the passengers are not allowed to pay a fare to cover the cost of sharing, and this is yet another area where relaxation of the law is needed.
Thirdly, there is the clear social need of people living in isolated villages who have to get to doctors and hospitals and to do their shopping but are unable to do so. We need a relaxation of the law to allow voluntary drivers and mini-buses to take these people where they want to go. We should also allow a sharing of cars and permit the sharing of essential


costs and the provision of hospital and emergency car schemes.
The fourth area, which is closely related, is the area in which the Government have given their support to the Bill introduced by my hon. Friend the Member for Wirral, which relates to the provision of mini-buses by voluntary organisations. There is an extremely urgent need for the Bill. I welcome the fact that it has passed through its Committee stage and hope that it will be on the statute book in the very near future.
The final area, which was referred to by the hon. Member for Gloucestershire, West, is the problem of schoolchildren. Here there are problems connected with the use of school buses, which in many county areas are under-utilised outside those times when they are used for taking children to and from school. There are also problems affecting people who live just beyond the two-mile or three-mile statutory limits and who therefore have difficulty getting their children to school cheaply. Here again, relaxation of the law is needed to allow experimentation and innovation to lead to an improvement in the situation.
I support what was said by my hon. Friend the Member for Sutton Coldfield. The Government should have introduced a comprehensive approach to the problem a long time ago. They have been dilatory and have only tinkered with the problem, for which they deserve to be condemned.

5.41 p.m.

Miss Joan Maynard: I represent a constituency in Sheffield, a city based on heavy industry, but I am the only Member sponsored by a union which represents the interests of farm and rural workers. The question of rural transport is of tremendous importance to them and to everyone in rural areas.
I find the attack of Opposition Members rather hypocritical, because they have been calling for more and more public expenditure cuts. Surely, if one reduces public expenditure, it makes it more difficult to subsidise rural transport. Also, the core of the philosophy of Opposition Members is the profit motive. Surely it is the profit motive that has driven rural transport into the ground?
Will the learned Lady confirm that her answer is solely to increase the subsidy for providing rural transport?
That is against the whole tenor of the debate. Many other alternatives have been put forward. Does she not agree that while subsidies have increased, services have been reduced?

Miss Maynard: I shall explain how I think the problem should have been tackled in the past and how it should be tackled now. If we had tackled it in a logical way we would have gone for an integrated and co-ordinated transport system a long time ago. In that way we would have been tailoring our transport system to the needs of the people. We would have been using those areas where the population was greater to help the rural areas.
One hon. Member has stated that if we did that in Cornwall it would mean a very heavy burden, for example, on the one area that had a large population. I am not proposing that we should do it on the basis of counties but on a national basis. This should have been done in the past.
I am sure that many hon. Members regret the Beeching cuts on the railways. We may have listened at the time to those who called for an economy drive and the specialists who thought that they knew best, but many of us realise today that those decisions were fatally wrong. Public transport should be a public service because it is of so much importance to the community.
One Opposition Member has referred to the example of South Yorkshire. The South Yorkshire experiment is sound from an economic point of view and has been extremely successful. The buses in South Yorkshire are full. It has also been successful in the social sense because it has helped the ordinary and less well off people in the community. Had we had this approach throughout the country we would not have had the growing bus crisis in rural areas. We would not have had inadequate services or, in some cases, no service at all.
Bus services have been deteriorating at an alarming rate in recent years, and that has been causing enormous hardship to those least able to bear the consequences, the aged and the less well off. I am sorry that my right hon. Friend the


Secretary of State is no longer in the Chamber. He said that these are times of hardship for all of us, and if they are times of hardship for Secretaries of State, how much more must they be times of hardship for low-paid workers in rural areas?
My right hon. Friend also said that he did not think that we ought to introduce the question of increased petrol charges in this debate. I am glad to see that my right hon. Friend is back in the Chamber again, because I want to tell him that it is impossible to divorce the increased petrol charges from the debate because they will have such a serious effect on people in rural areas. My right hon. Friend said that the effects are not exclusive to rural areas, but I must point out that they are particularly pernicious to people in rural areas because of the effect on jobs and the isolation of people who live in areas where public transport is lacking.
It has always seemed particularly unfair that a company director running a car can set the cost of that car, or some of the cost, against tax, but a worker who must have a car to get to work cannot do so. I do not know whether it is possible to do anything about that but I hope my right hon. Friend will look at that problem, because it seems iniquitous.
Reference has been made to problems that arise from centralisation. I share the concern of other hon. Members about the centralisation of hospital services and the building of huge new district hospitals which are impersonal and virtually impossible to visit except by car because of the lack of public transport in rural areas. We have built lovely new health centres in market towns but people in the villages who do not have cars find it almost impossible to reach them. There is also the difficulty of collecting prescriptions and the difficulty of shopping. At a conference in Cornwall last month one hon. Member said that he and his wife had to travel 14 miles each way to get their groceries. That kind of situation is faced by many people in rural areas.
It is only on schools that I am not so sure about my attitude to centralisation. I believe that the closure of one-teacher schools has been a good thing from an educational point of view. In my experience as a member of the North Riding Education Committee for nine

years I know that, when we were interviewing for head teachers, we found that the calibre of applicants for one-teacher schools was very poor. I therefore think that there is a good educational case for having bigger schools with two or three teachers.
Nevertheless, I am concerned about the transport problems created by the centralisation of schools, particularly the problem of taking five-year-old children straight from their homes to school and the effect of that on a child and also the additional strain imposed by taking that child by bus to an adjoining village. The ideal solution would have been to have nursery schools in every village for the four to six-year-olds and not take children to the bigger schools until they were six years old, although I accept that that would have been expensive.
The vehicle licence fee is important, too, and the increase here will hit the lower paid. The well off will pay the licence fee for a year, but those not well off will pay at intervals and in that way pay more. Again, the least well off will be asked to pay even more.
I look forward, as do other hon. Members, to the White Paper. I was interested to hear my right hon. Friend say that in it there will be a proposal to give extra special help to the rural areas. I hope that that help will be substantial.
I conclude with another reference to the petrol duty, and I ask my right hon. Friend and the Government to think again about the increase which they have introduced. The effect on people in rural areas will be traumatic. It will be traumatic for all workers who use cars to get to work, but workers in rural areas will be particularly hard hit. I urge the Government to think again very closely and carefully on this issue, because many of us will have to think carefully about how we shall vote on it.

5.50 p.m.

Mr. Gwynfor Evans: Cars in rural areas are an outstanding example of what were luxuries in one generation becoming necessities in the next. I live in a large constituency. In size, it follows closely on the heels of the constituency of the hon. Member for Brecon and Radnor (Mr. Roderick), and it forms part of a county which contains


only four constituencies yet covers a quarter of the whole area of Wales.
In my constituency there are 55 villages with no bus services and no train services at all. In such circumstances, where people have to travel a long way to work, it is useless to talk of concessionary fares. I was told last night by my hon. Friend the Member for Caernarvon (Mr. Wigley) of a craftsman in Aberdaron in Caernarvonshire who travels every day a distance of 45 miles to work in Bangor, a daily total of 90 miles. That is certainly not the average. I think that the average is more closely illustrated by the journey made by two young women who live in a village not far from Carmarthen who travel daily a distance of 14 miles each way to work in a shop in Carmarthen. It costs them £6 a week for petrol alone, without all the other costs which cars are heir to.
Those are examples of the situation in rural areas. I could give hundreds of others. They come to my notice all the time in my surgeries. I move among these people, I live among them, and I know them well. For instance, I know of a father of three, a craftsman, who has to go from a village near Carmarthen into Carmarthen, and the distance is 14 miles. It costs him £6 a week for petrol alone, and his total take-home pay is £43 a week. In my village we have a creamery, a milk factory, to which people from villages round about, from such places Rhandirmwyn, Cwmllynfell and Llandybie, have to travel every day. [Laughter.] In a Welsh Assembly there would be no smiling at that, because all these places would be well known. People have to travel anything up to 10 or 20 miles to the creamery each day to get to work. Their average take-home pay is about £40 a week.
It is no use our boasting that we have the cheapest petrol in Europe when people have only £40 a week and they have to pay £5, £6 or £7 every week for petrol. That is the problem which we face.
The situation is worse in Wales than it is in many parts of Britain because the average income in West Wales at least is only some 74 per cent. of the average in Britain as a whole.
I emphasise again that in such areas cars are essential. They are essential not

only for middle-class people but for those in the lower income bracket. The choice is between making it possible for rural workers to get to work or having yet more rural depopulation and unemployment, with a still emptier countryside and fewer chapels and churches, fewer schools, fewer societies and fewer institutions of all kinds to make life interesting. This is the consequence of our transport problem—the depopulation of our countryside, a countryside which was once so interesting and lively a place in which to live.
In my area today, people can live—indeed, they have to live—without refrigerators and without washing machines, but they cannot live without cars. Cars are an absolute necessity. I recognise that the local authorites are coping as best they can with the situation. I hope that the outcome of the experiments now in process in our district will bring improvements in some places and even the renewal of bus services in some villages. Improvement is of immense importance for people of many classes, and especially for the elderly, the many old-age pensioners, for example, who cannot afford to keep a car and who therefore cannot visit a hospital, go to see the doctor, do their necessary shopping or even go to the chemist unless they can find a neighbour to help them. We should be thinking of all such people, and the local authorities, certainly in my area, are doing just that.
Apart from the increased cost of petrol and other taxes, there are the cuts in public expenditure, including expenditure on roads, which result in deterioration in public services. In my constituency, for example, there are nearly 2,000 miles of road, and, as I have said, my constituency forms part of the county of Dyfed, where there are four constituencies. In his report last year, the county surveyor said that, on the existing budget, the cycle for resurfacing the county's principal roads would be 51 years, that is to say, it would be completed in the year 2028. For unclassified roads, on the other hand—there are 1,500 miles of unclassified road in my constituency alone—he said that the cycle for resurfacing was 259 years. In other words, all the unclassified roads in Dyfed will have been resurfaced by the year 2236 AD.
Many of these roads need urgent attention today. They need urgent attention because of the development of the bulk


milk tanker, as anyone who lives in a rural area knows. These vehicles just cannot go along many of our roads. Urgent attention is equally necessary if we are to have the development of small rural industry which we so badly need. The number of unemployed is appalling, and in many areas vacancies or jobs are almost non-existent.
The situation would be less grave but for the cuts in bus services and the closure of railway lines to which reference has already been made. Those railway closures came in the more distant past, of course, but each of the lines remaining to us in Wales is a constant source of anxiety. The hon. Member for Brecon and Radnor spoke of the Mid-Wales line, and I support him completely on that. I hope that that line, which runs through the glorious countryside of Mid-Wales, will remain. Although it is a light railway now, it is none the less necessary for those who live near it so that they may get to work, and it is being used greatly now for several months of the year by those who take advantage of it as part of the growing tourist trade in Wales.
The same is true of the Aberystwith-Shrewsbury line and the Cambrian line, too. The closure of any one of these lines would be a fearful blow to the economic and social life of Wales.
Moreover, workers on the Swansea-Fishguard line are frightened every time some service is withdrawn, as happens from time to time. The Fishguard-Waterford trade is a current source of anxiety also, and it is felt that it should be a matter for public inquiry. But, then, the whole of rural transport is a matter for public inquiry, for inquiry in depth, and I hope that we shall find that that will be the outcome when the White Paper is published. We would have a happier situation if Wales had a Transport Board for the whole country. I am sure that when we get a Welsh Assembly this will be given the highest priority.

6.0 p.m.

Mr. Jim Spicer: The Secretary of State rightly referred to the genuine concern about this subject. There is an underlying concern about the problems of rural transport. The Government highlighted that in their consultation document. Paragraph 3.3 states:

People have a right to expect a reasonable degree of mobility".
In the last 10 or 15 years those of us who live in rural areas have been increasingly deprived of that essential mobility. The tragedy is that we see it decreasing at the same time as a reduction in our services. Our doctors are moving away from the villages. Our chemists are closing down. Our dentists are going away to work in multiple practices elsewhere. At a time when we need more mobility, we have less.
I make no apology for mentioning my own constituency. There are two aspects of maximum hardship. They involve those at work and those who have retired to the area. In West Dorset we have an unemployment rate of 11·7 per cent. Yeovil, with Westlands, is the great magnet that lies some distance away. Because of the high unemployment in the depth of my constituency people are travelling between 20 and 55 miles a day to get to Yeovil. First, because they must use their cars to work, they find that they must leave their wives and young children in an isolated hamlet miles from anywhere with no transport. Secondly, the increased costs of getting to work is forcing them to leave villages in which they have lived all their lives in order to live in Yeovil. That is the last thing that they want to do.
I shall give an example of the problems experienced by those who have retired. A couple retired last October. They bought a bungalow one and three quarter miles outside a small town, just off a main road which has no pavement. They had a car and thought that they would continue to keep it to do their shopping in town. They find that they cannot keep their car. They cannot walk down the road because it is narrow and busy, particularly in summer. The road is due for improvement but it is being delayed. The bus fare into town is 18p each way.
The hon. Member for Truro (Mr. Penhaligon) said that his constituents often had to pay as much as 7½ a mile. My example is considerably more. It illustrates the problems. The couple do not know which way to turn. They live only one and three quarter miles out of town and yet they are completely isolated. The Minister said that it is a "Catch 22" situation. I agree with him.
The problems stem from two factors—the monopoly position that the National Bus Company has enjoyed for many years and its continual demand for more subsidies. I mentioned the buses unashamedly because in rural areas 50 per cent. of journeys are made by bus. The railways play a small part. More and more money is being poured into the National Bus Company's services. In 1970 the subsidy for Dorset was £18,866. In 1977 the subsidy for Dorset and Bournemouth was £748,000. I am not surprised that some of the counties, when examining the poor services and return from more subsidies, are beginning to say that they do not represent only ratepayers but taxpayers. They are therefore saying that they must cut back. I consider rate and taxpayers together. I take issue with the Secretary of State on that.
I turn to the rôle of the traffic commissioners. It would, perhaps, be wrong to say that they are the niggers in the woodpile. But they have too much power. Many of their powers are outmoded. Inquiries and investigations have revealed that their action and their positive rôle has often been to deliberate, to delay and to vacillate. The Minister talked of the Oxford scheme. The delay last year, before it was implemented, was scandalous. The traffic commissioners were the cause of that delay. I should like to see the rôle of both the National Bus Company and the traffic commissioners reduced. I should like to see the establishment of a national network covered by the National Bus Company.
The people who know and understand the problems of rural areas, or those of other areas, are the local councillors. They should be held to account. I should like to see not the establishment of an amorphous national system but a reduction in these powers. I am not against subsidies. Services cannot be run without them. County, district and parish councils should work out their own schemes and be allowed to do their own things. National schemes should not be imposed upon them.
My hon. Friend the Member for Shoreham (Mr. Luce) said that it was fine to have experiments and he mentioned a period of two years. Experiments may be all right but they take

time. In this matter, hardship is involved. We do not have time.

6.7 p.m.

Mr. Max Madden: The debate has illustrated in detail the importance of transport—both private and public—to rural areas. By this time the Minister will be fully aware of the importance of transport to the family living in a rural area. It is important not only for work, schooling, shopping and leisure but because of the increasing need of people living in non-urban areas to visit towns. The offices of reorganised local authorities and other public facilities are often to be found only in towns.
The Government will also be fully aware of the transport costs falling on family budgets. The transport costs of families living in rural areas represent a large proportion of their budgets.
We have heard about increasing car ownership, which in many cases is a necessity in rural areas. This has contributed to the decline in public transport. I was interested to hear the Secretary of State refer to that as the "circle of frustration", an apt description for the feelings of many people living in rural areas who have witnessed a decline in public transport systems. Many services have been terminated.
We should not be misled into believing that the problems of the car dominate everything. We must remember that thousands of people living in rural areas do not own cars. If they are forgotten and public transport is abandoned, they will become increasingly isolated and we shall see an acceleration of emigration and a decline in industry.
The debate indicates a general genuine desire for a major campaign of support and money for public transport. People living in rural areas can be assisted in a number of ways, which have been suggested in the debate. Together with my hon. Friends, I certainly welcome the experiments in transport about which we have heard this afternoon. The 16 experiments now taking place must be welcomed. I look forward to an early extension of those considered successful to other parts of the country.
First, however, I should like a general recognition that subsidies are necessary to enable public transport to survive. I do


not think that we can dodge that recognition. Secondly, I believe that there is a great need for a fares policy, on both rail and buses, that encourages use. I believe that the present policies have brought us to a situation—certainly on the railways—in which we are near, or beyond, the point of diminishing returns.
I believe that British Rail has successfully introduced a number of special offers that have been designed to increase rail use. I am, therefore, sorry to hear that British Rail, as from September, I understand, is to discontinue the juvenile season ticket and charge full fares for youngsters travelling regularly to school by rail. I understand that this move has been approved by the Price Commission. I urgently ask my right hon. Friend the Secretary of State to review this move because I think that it is a retrograde move and certainly one which is not in the interests of parents or, indeed, in the long-term interests of British Rail.
In that connection as well I should like some comment from the Minister about bus passes for schoolchildren. He has heard some of the anomalies mentioned by my hon. Friend the Member for Gloucester, West (Mr. Watkinson), but I would ask him whether there is any possibility of making the present arrangements more favourable. It seems that a circle is drawn around a school on a map and anyone living a few yards inside the circle does not merit a bus pass while a child living a few yards outside the circle gets a pass. This is anomalous, and I certainly ask that the arrangements be made more favourable.
I should also like to hear some comment from the Minister about the possibilities that I understand are open to companies to provide transport for workers, particularly those who are engaged on shift work. I understand that the provision of transport for workers to travel to a company is a wholly allowable expense. This is an arrangement that could be extended. It is certainly a matter to which publicity needs to be brought.
We certainly need—this has been stressed—a very flexible approach in the provision of transport. We need different types of vehicles, vehicles of different sizes, and vehicles operated over flexible routes. This is very much the objective of the experiments about which we have heard today.
I pose another question about bus fares. I remember that a little while ago the Secretary of State confessed ignorance as to why applications to increase bus fares were not dealt with in the same way as applications to increase rail fares. That is something that I cannot understand. I believe that the traffic commissioners who consider applications for increases in bus fares are remote bodies and individuals with little opportunity for public accountability. Again, I suggest that this is something that could be usefully looked at so that we can have public consideration of applications to increase bus fares.
I come lastly to the whole issue of petrol costs and the excise duty. I believe that the increase recently announced has been very substantial, and it bears very hard indeed upon those living in rural areas, particularly those who need a car for travelling to work and for the other reasons that have been set out. I understand some of the reasons for that increase. I do not understand the reluctance to reintroduce a differential excise duty, which I think would help in conserving energy and petrol supplies. Again, this is something which, in equity and in the interests of conservation, should be examined urgently.
I welcome, however, the Government's determination to reduce expenditure on motorways. There is still an enormous lobby pushing for major road-building exercises, and we ignore it at our peril. Recently the Department of the Environment published details of the tax revenue as opposed to the cost of heavy lorries. I am sure that the House will share my concern about the figures published in the survey, which showed that a 32-ton, four-axle "artic" attracts subsidies of about £1,700 a year, and there are more than 41,000 of those vehicles. A two-axle rigid vehicle is subsidised to the tune of £412 a year, and there are 76,000 of those vehicles. Other categories of vehicle attract subsidies of between £200 and £1,400 a year. Therefore, in the face of those figures we must reject the very fierce campaign of the road lobby for more and more big money to go into major motorway-building exercises.
I must here warn that in "Black Top", the journal of the Asphalt and Coated Macadam Association, a copy of which reached me today, the Opposition


transport spokesman is quoted at length. He says,
We"—
that is, the Opposition—
recognise the economic importance of roads investment.
He goes on to talk about this being a major priority.
I think that we also need to contrast those comments with the comments of Tories in some other parts of the country, because I believe that transport is of crucial importance. In Tyne and Wear we find that the Tories are simultaneously calling the bus service a disgrace and complaining about subsidies. The conclusion must be that fares would rise steeply and that concessionary fares would go, yet the Tories do not mention fares at all in their electoral literature for this week's county council elections in the Tyne and Wear area.
The Tory candidate seeking my support for election to the West Yorkshire County Council tells me in his leaflet that the Tories, if elected, would provide passenger transport tailored to the needs of the community, and that financial support will be given only to meet essential needs. Commenting on the railways he produces a gem of electoral vagueness by saying,
Our railway line is a vital link for all of us, which must be maintained—but at what cost, and at whose cost? Getting adequate information about the cost is difficult, but I am sure the cost is high; however, unless we are to become even more of a backwater that cost must be found from somewhere.
Unfortunately, the railway is not an adequate answer to some of our industrial problems and transporting goods without a great deal of capital expenditure in millions of pounds.
In Derbyshire the Tories have excelled themselves, even by their strange standards, by advocating a reduction in bus services and that passengers left by buses miles from their homes be driven home by teams of volunteer motorists. Such are the barmy depths of Tory transport policies in some rural areas.
I believe that Labour's policy on transport must be for a better public transport system, proper transport subsidies to provide it and to hold down fares, proper co-ordination of transport services and a real belief in the importance of transport, especially for people living in non-urban

areas. The Government have received a number of ideas in the debate. What we want, and what I believe has already been demonstrated, is a real determination to implement some of these ideas.
The people living in rural areas are extremely anxious for action to be taken. We have indicated that that action is to be taken. What we want now is for it to be pressed on with a sense of urgency and a real belief in success.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I am hoping to call other hon. Members, but I understand that the Opposition Front Bench reply will begin at about 6.30 p.m. I hope that hon. Members will bear that in mind.

6.20 p.m.

Mr. Nicholas Fairbairn: I regret to say that that party political broadcast will not get my vote in the rural areas of Westminster on Thursday.
May I pay tribute to the Minister? He appeared in a television programme on transport recently. I think that he understands the problems and is anxious, if he is allowed, to find the solutions. Perhaps with him more than with most holders of his office this is the case. At the same time, I do not think that he did himself any service by alleging that this matter, being raised by Conservative Members, was a matter in which we were not interested. It is a matter in which we are intensely interested. Transport affects the whole of the United Kingdom. I find it extraordinary that the Secretary of State and his hon. Friend the Under-Secretary, who is a Welshman—[Interruption.] He ought to be if he is not, Mr. Speaker.

The Under-Secretary of State for Transport (Mr. John Horam): Will the hon. and learned gentleman withdraw that remark?

Mr. Speaker: Order. I hope that he will not.

Mr. Fairbairn: I do my best to pin pearls upon swine, but if they will not accept them, it is no wonder that the pig industry is in trouble. It is unfortunate that no Scottish Office Minister has been present during this part of the debate because, with the possible exception of Wales, there is no other part


of the United Kingdom which has a bigger rural transport problem.

Mr. William Rodgers: I know that the hon. and learned Gentleman will not wish to be unfair to my hon. Friend the Under-Secretary of State for Scotland, who has been here for a large part of the debate.

Mr. Fairbairn: With great respect, the Under-Secretary has not been here for a long time. I timed him. He was in the Chamber for six minutes. I can tell the Secretary of State which six minutes they were.
There is, however, one matter with which we ought to deal, a matter which was raised by the hon. Member for Galloway (Mr. Thompson). If he thinks that it will be difficult to co-ordinate everything with a Scottish Assembly, what will happen to British Rail and the National Bus Company if there is complete independence? Co-ordination will be utterly impossible. The logic of the hon. Member's argument is defeated by his party's policy.
It is important to remember that rural people do not complain. We should remember the extent of the burdens which they have to bear, which are not borne by urban people. On the farms there is tractor fuel to purchase. That has gone up in price. They have to use a Land-Rover, probably using diesel, to fetch supplies and spares over long distances. Diesel, too, has risen in price. Such people have to use a car to buy things like a postage stamp, to take their families to town, and for a host of other reasons.
There are major burdens on those living in rural areas not experienced by people in the urban areas. Lower wages are paid in the rural areas. The rural people do not complain.
It is not spurious for us to raise this matter. No one in the country uses more fuel than he needs. It is not as if we were lashing it around so that the Chancellor had to say "You are wasting valuable energy. We shall put a stop to that".

Mr. Penhaligon: Would the hon. and learned Member agree that the ludicrous car allowance which we receive as Members of Parliament encourages us to drive our cars unnecessarily between our constituencies and the House?

Mr. Fairbairn: I do not drive my car between my constituency and the House. I am glad to welcome the Under-Secretary of State for Scotland, who has been quickly summoned to correct the error which his right hon. Friend made. I hope that he understands the small part of my speech that he will hear.
In the country the distances that people have to drive are in inverse proportion to their income. I do not think that that is sufficiently understood. My constituency is 80 miles by 100 miles. It is transfixed from north to south by a railway line, yet British Rail refuses to halt the trains using the line so that they can serve the villages. A person who lives in Dunkeld or Killin cannot get into Perth to shop. He cannot go to Callendar to shop unless he stays the night there, because, once in town, it is not possible to get back on the same day.
There are thousands of villages in the rural areas in which there is effectively no public transport. What we need is a development of the postal buses, an integrated system, with an allowance for the local man, the grocer, or postman, who has to do it himself. At present such an arrangement is forbidden.
There are enormous possibilities in these areas for the imaginative development of transport. At present there is too much centralised prohibition. That will no doubt appeal to Labour Members. They preach that Socialism is the great egalitarianism: everyone must be equal and everything must be fair.
If there is one area of unfairness it arises because the rural areas increasingly have to pay the rates for urban transport. I hope that it is appreciated that the rural population will have to leave the countryside unless a solution is found to the problem. For those who live in the countryside the only means of getting food, of making contact—of surviving—essentially lies with the motor car. Thousands of people in my constituency do not mind walking. They have to walk further and further to get the necessities on which they rely. If the Ministers sitting on the Front Bench did that—at any rate, the Under-Secretary of State for Scotland—they would have a figure like mine.

6.25 p.m.

Mr. William Hamilton: The greatest discipline that can be imposed upon any hon. Member is to tell him that he has five minutes in which to make his speech. Since I am under that discipline, I had better be as brief and as succinct as I can be.
I have not been present for all of the debate, but what I have heard leads me to think that there are one of two matters on which I ought to comment. The first is that all of these problems—whether they relate to the current debate or to the subsequent debate that we shall have on the construction industry—stem from inflation. That is our basic problem—our public enemy No. 1.
It is easy for hon. Members to pose problems. As far as I can gather, we have been very thin on solutions which do not incur considerable amounts of public money, which we do not have. This is the problem. As there are increased demands, whether for rural transport, schools, or hospitals, it must mean increased public expenditure. Those who advocate that, quite properly, must also advocate public expenditure cuts elsewhere.
I emphasise the undue concentration on the car that has been evident during the debate. The Government ought to take into account the fact that the car is not necessarily always something to be desired. In cities the car is an antisocial machine. Our fiscal system ought to take account of that.
We have all seen the fellow who drives into the city alone. We can see this in the rush hour in London, when nine cars out of 10 have only one occupant. There is no more anti-social exercise than that. The hon. Member for Truro (Mr. Penhaligon), in an intervention, made a pertinent point when he said that the car allowance that we receive encourages hon. Members to behave in this way.
I live a few miles out of London and could use public transport. I do not. There ought to be a penalty imposed on me and the likes of me to discourage us from using the car. If we persist in doing so, we should pay a proper charge, which could then be channelled into the rural areas.
I agree with those who say that there is a social problem in the rural areas. It

does not affect only the rich people. The debate has tended to emphasise the hardship encountered by car owners in the rural areas. We have tended to forget that, although car ownership has increased greatly since the war, there is still a substantial proportion of the population who, for one reason or another, do not own a motor car.
That brings me to my central point, namely, the fact that this problem will not be solved unless we regard transport as a public service requiring increased public investment. Here I emphasise the railways. I disagree with the road lobby. Priority must be given to rail services rather than to the roads. Whoever advised the Government to impose this 51p tax on petrol ought to be sacked forthwith. There is something wrong with the thinking of anyone who can give that advice to the Chancellor. He does not know how the country ticks. He may appear in the next Honours List for all I know. This is the way we are run. Such people must understand the problems being faced by people all over the country.
The Scottish National Party Member based his arguments entirely on the principles enunciated in the recently issued canvassers' guide book, the basic principle of which is "If people are bellyaching, you should bellyache with them, no matter what the subject." In this period of rampant inflation there is bellyaching all along the line, and it is the easiest thing in the world to agree with people on various topics. The difficulty is to pose viable solutions.
As the hon. and learned Member for Kinross and West Perthshire (Mr Fairbairn) said, Scotland has a central industrialised belt, but the Lowlands and the Highlands must be subsidised somehow if they are to survive. In that context private enterprise and the profit motive are irrelevant. The subsidy must come from public finance, namely, from the taxpayer.

6.30 p.m.

Mr. Roger Moate: When we first tabled the motion calling for a reduction of £100 in the Secretary of State's salary I thought that we were being rather severe. Then, as the Secretary of State's speech developed and it was obvious that his thinking was becoming more extreme, I became


increasingly amazed at our own moderation. I thought that if the right hon. Gentleman had been docked £100 for every bad point he made, he would have ended up by owing the country money.
The right hon. Gentleman brushed aside the very important point of the increase in motoring costs, which fall heaviest in the rural areas. He failed completely to deal with the key issues of the increase in petrol tax and the vehicle excise duty. I cannot understand how a Secretary of State can take part in a debate on rural transport without dealing with those key issues.
The right hon. Gentleman then, I thought rather offensively, suggested that we had tabled the motion to gain votes in the county council elections. I do not know whether the right hon. Gentleman noticed a little by-election result at Ash-field, but I can tell him that we do not need to engage in such ploys to secure a few votes. The hon. Member for Truro (Mr. Penhaligon) suggested that we had tabled the motion to put the Liberals on the spot. It might come as a surprise to the right hon. Gentleman and to the hon. Member for Truro to learn that we tabled the motion because we care about the problems in the rural areas, as—I believe—do the hon. Member for Truro and the other hon. Members on the Opposition Benches who have spoken today.
I am delighted to learn from the hon. Member for Truro that the Liberals will be voting with us tonight. I hope that the hon. Member will not take it amiss if I say that we shall be voting in the Aye Lobby, which is that Lobby over there. The last time we had a similar vote was in 1974, when we made proposals for relaxing the licensing system. Unfortunately, on that occasion the members of the Liberal Party rushed in rather late and cast their votes in the wrong Lobby. They then proceeded to correct that and to vote in the right Lobby. Thus, they voted both ways on the same issue, which is, of course, an alternative to not knowing which way they will vote.
Anxiety about the problems of those in rural areas has been expressed time and time again by Opposition Members in recent years. We have had innumerable debates on rural transport, on the problems of licensing, on rural motoring costs and on rural bus services. Invariably we

have had sympathetic and understanding responses from the Secretary of State or the Under-Secretary, followed by departmental dithering and total inertia.
Later in his speech the Secretary of State made a very strong attack on certain county councils. He even used strange phrases such as "their nefarious activities". The right hon. Gentleman should check his facts before making such attacks.
This is not the first time that such attacks have been made. On 6th April the Under-Secretary said:
Last year, North Cornwall failed to pay £250,000 that it had received in bus revenue support.—[Official Report, 6th April 1977; Vol. 929, c. 1205.]
Earlier the Under-Secretary had described that council as a Conservative-controlled county council.

Mr. Horam: No.

Mr. Moate: I have the Official Report here. I can tell the hon. Gentleman that there is no such county council as North Cornwall, but that is a minor detail. If he was referring to Cornwall, that is not Conservative-controlled. However, perhaps these are only minor points of accuracy.
It is worth putting on record the response to those allegations of the Press officer to the Cornwall County Council. He was reported as saying:
Mr. Horam's conclusions could not be more wrong…
Instead of being criticised the independently controlled council should be congratulated on good housekeeping for it has achieved significant savings of public money without diminishing public bus services…
It was eventually agreed to pay Western National £52,000. 'Quite a bit less than asked for, but they agreed on that figure', he said.
'The money the council saved is still in the Government coffers, and they should be pleased with Cornwall acting so responsibly.'
That is one example. With such errors emanating from the Secretary of State and the Under-Secretary, one begins to doubt the whole case put forward.
However, that is not all. I have another example. This afternoon, the Secretary of State vigorously attacked Cambridgeshire County Council. I understand that the council has cut back on bus routes which cover less than 50 per cent of costs. I am told that the


National Bus Company in the area is in agreement with the policy and that no unemployment among NBC employees has resulted. That seems to be a proper and responsible approach and I am amazed that the Secretary of State should attack the council as he did.

Mr. John Cope: I took the precaution of checking with the Avon County Council, which covers most of my constituency and which was mentioned by the Secretary of State this afternoon. Indeed, he made the same accusation about the Avon County Council. The councillor to whom I spoke refuted the Secretary of State's allegations in the same detail as my hon. Friend has just given in the case of Cornwall.

Mr. Moate: Now we begin to see the justification for reducing the Secretary of State's salary. I rather regret now that we have sought to reduce it by such a modest sum only
If the Under-Secretary intends to reply to some of these points, perhaps he will answer the point-blank question posed by my hon. Friend the Member for Sutton Coldfield (Mr. Fowler), namely, whether it is part of the Labour Party's programme to back up the promise of free fares on buses put forward by the Labour Party in its campaign in the West Midlands council elections.
I turn briefly to the key question of licensing. The Secretary of State attacked us for putting nothing dealing with this matter on the statute book during our years in office. The reason we put nothing on the statute book was that the Labour Party deliberately abandoned the provisions that, prior to the February 1974 General Election, it had seemed all set to accept. It is true that we had periods of experimentation in 1971. We had a process of consultation and then we made proposals. The Government are going through the whole long process again.
The Government's commitment to the Passenger Vehicles (Experimental Areas) Bill was so feeble that they had to rely on the Opposition's co-operation to allow the Bill to be taken in a Second Reading Committee. The right hon. Gentleman's imagination took flight when he came to deal with the licensing system. He talked

about our proposals to relax and reform the licensing system and not to abolish it. He said that this could mean the plundering of the profitable routes by people only in the business for a fast buck, and he said that it would be a free-for-all. This sounded to me much more like buccaneering on the Spanish Main than Britain in the late 1970s and 1980s. Perhaps he should welcome compensation of that sort for buses, as the public would.
In our debates on the Road Traffic Bill in 1974 the hon. Member for Nuneaton (Mr. Huckfield) referred to
The spectre of returning to the competitive era of the 1930s".—[Official Report, 30th January 1974; Vol. 868, c. 555.]
All I can say is that the public would welcome such competition for the privilege of carrying them to and from their homes, or wherever they wish to go.
We do not blame the Government for all the problems in the rural areas. We realise that there has been a major social change. We know that the number of car owners has increased from 2 million to 12 million in the past two decades and that bus travel has diminished by 50 per cent. Inevitably the major part of the problem relates to the rural bus services. But the Secretary of State and his predecessors are very much to blame for the way in which they have allowed the problems to escalate and for the fact that it has taken them three years to introduce the modest Bill on experimental areas.
Had the Government allowed the Conservative proposals of 1974 to proceed in the rural areas and had they reached the statute book, we should be in a much stronger position and would be better able to take care of the crisis which has developed. "Crisis" is not too strong a word to use. I hope that, as a result of this debate, the right hon. Gentleman realises the depth of feeling in areas where communities are becoming increasingly isolated and where all the ordinary activities of day-to-day life are becoming much harder to perform because of the crisis. We do not say that a relaxation of the licensing system would be an immediate panacea for the problems, but it would make a constructive contribution to their solution.
The reluctance of the Labour Party to admit competition in the provision of


public services in these areas is quite extraordinary. Even the Bill now going through Parliament is notable for its omission of the right of commercial operators to use mini-buses. That is very strange. The Minister in another place, when introducing the Bill on the experimental areas, said:
The essential point here is that the Bill is not intended to provide short cuts for people who want to be in the business of carrying passengers."—[Official Report, House of Lords, 15th February 1977; Vol. 379, c. 1518.]
It is extraordinary that the Labour Party should be so determined to prevent operators from carrying people for profit. We do not say that the mini-bus is the answer to all our prayers, but the solution to the problem lies largely in the operation of commercial mini-buses in many areas. Yet that possibility is deliberately excluded from the Bill.
I must allow time for the Under-Secretary of State to reply, but before concluding I must deal with the question of petrol duties, which was totally ignored by the Secretary of State. The right hon. Gentleman must understand that the problems of the rural areas are different from those of the urban areas. In many instances there is literally no alternative in the rural areas to motor transport as a means of getting to and from work.
In addition, average earnings in many rural communities are less than the national average. In Devon and Cornwall they are about £10 a week less than the national average. Further more, petrol prices in these areas are already very much higher, because there is no scope for shopping around for cut-price petrol as there is in many urban areas.
Therefore, when the Chancellor of the Exchequer increased petrol tax by 5½p and increased the vehicle excise duty to £50—roughly a 100 per cent. increase in petrol tax and a 100 per cent. increase in vehicle excise duty since the Labour Party took office—he dealt a double blow at the motorist. Even if the Secretary of State for Transport wishes to demonstrate his concern for the rural areas, the Chancellor has sabotaged his efforts.
The Chancellor has dealt a major blow at the rural motorist for whom the car is an essential, not a luxury. No doubt the right hon. Gentleman will have to answer, as will his party, to the electorate for his insensitivity on this fundamental

issue. No doubt his colleagues will want to take him to task for his political ineptitude.
We ask the Secretary of State to answer for his failure. His party, which was elected on the pledge of a co-ordinated and integrated transport system, after three years in office and, I suspect, in its dying days in office, has suggested an experiment. Therefore, we tabled the motion suggesting a modest reduction in the salary of the Secretary of State as a way of demonstrating our strong criticism of the Government's conduct of transport matters, particularly in the rural areas.

6.45 p.m.

The Under-Secretary of State for Transport (Mr. John Horam): Despite the attempt of the hon. Member for Sutton Coldfield (Mr. Fowler) to launch what appeared to be a major and certainly a vehement political attack, and despite the attempt of the hon. Member for Faversham (Mr. Moate) to soup it up, I think that most hon. Members would agree that this has been a low key debate, because a certain unanimity about the problem has been demonstrated, to such an extent that the debate could almost be said to be an endorsement of the speech of my right hon. Friend the Secretary of State and the ideas that he put forward.
The hon. Member for Galloway (Mr. Thompson) said that he would vote against my right hon. Friend in order to encourage him, which seemed to me a remarkable piece of Scottish logic. Such was the enthusiasm for my right hon. Friend's proposals that they were endorsed by hon. Members on both sides of the House.
The fact that this feeling was demonstrated on both sides of the House must have been to the chagrin of the hon. Members for Sutton Coldfield and Faversham. However, I was rather suspicious when it appeared that the final coping stone for the general superstructure of unanimity was being placed by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). I am not sufficiently conversant with Scottish politics to know what devious motives lay behind the hon. and learned Gentleman's comments.
There has been unanimity on a number of major matters, first, on the view that


rural transport has been neglected. My hon. Friend the Member for Gloucestershire, West (Mr. Watkinson) and the hon. Member for Leominster (Mr. Temple-Morris) referred to that matter. I am delighted to learn that there is one set of traffic lights for every 600 square miles of the constituency of Leominster. That is one of those transport facts which delight the aficionados.
There has been general unanimity that we need to consider planning and planning measures in the countryside with a view to their impact on transport. My hon. Friends the Members for Sheffield, Brightside (Miss Maynard) and Sowerby (Mr. Madden) touched on this point when they spoke about the centralisation of hospital services, schools and health centres causing the sort of transport problems about which they were concerned. Any Government must take seriously the link between land use planning and transport. A strong feeling against centralisation has been demonstrated by the hon. Members for Galloway and Truro (Mr. Penhaligon). Given what both of them said, I am surprised that they are even contemplating voting against the Government, but perhaps they have some political motive which I, in my naïve way, have overlooked.

Mr. Norman Fowler: Does the hon. Gentleman agree that another point which has been demonstrated is total opposition to the Government's proposal to increase petrol tax? Does he propose to say how the increase in petrol tax fits into the Government's transport policy?

Mr. Horam: The hon. Gentleman is on to a wrong point. I do not think that my right hon. Friend the Chief Secretary ever said that the increase in petrol tax had anything to do with transport. During the debate last Thursday on the Second Reading of the Finance Bill, he said:
But their merits"—
he was referring to other increases in indirect taxes—
on grounds of energy, transport and health policy have been recognised and have, I think, been by and large explicitly or tacitly accepted.
With the petrol duty, it is a different story."—[Official Report, 28th April 1977; Vol. 930, c. 1509.]
It was plain that he did not include transport reasons in his justification for

the increase in petrol tax. What my right hon. Friend was rightly referring to, my hon. Friend the Member for Sowerby again referred to it this afternoon, was the increase in derv. It was part of a general argument about the cost between rail and road freight.

Mr. Norman Fowler: Mr. Norman Fowler rose—

Mr. Horam: I am sorry, but I do not have very long.

Mr. Norman Fowler: Mr. Norman Fowler rose—

Mr. Speaker: Order. If the Minister is not giving way, I am afraid that the hon. Gentleman must resume his seat.

Mr. Horam: I think the reasons for the increase in derv and vehicle excise duty are well understood. They are not a part of any justification for an increase in petrol prices. Many of my hon. Friends, as well as several hon. Gentlemen opposite, referred to the consequences for rural transport of an increase in petrol prices. One can well understand that. But I would point out that this makes it even more important to support public transport in the way that we are doing.
I now turn to the particular points raised by hon. Gentlemen during the debate. My hon. Friend the Member for Gloucestershire, West talked about the anomalies of concessionary fares and schoolchildren's fares. My hon. Friend the Member for Sowerby also referred to this. These are very important points which we fully understand. I would point out that local authorities have discretionary powers to help.

Mr. Watkinson: That is the trouble.

Mr. Horam: My hon. Friend says "That is the trouble". I would go back to my remarks about the local options. I think that the local authorities have the right to decide these matters. I would also say that the Department of Education and Science is looking at this matter and discussing it with local authorities. It is something which is being discussed both locally and nationally. The problem of anomalies between different parts of the country should be of special concern.
My hon. Friend the Member for Sowerby mentioned transport provided by employers for employees being wholly allowable against tax. That is indeed


the case where they provide a bus or means of transport or voucher. Vouchers are taxable from the employee's point of view. It is a subject that should be explored further as we face the rising cost of transport for certain employers where there is a special transport problem and public transport may not be very good, which is possibly the case in my hon. Friend's part of the world.
My hon. Friend also said rather feelingly that the traffic commissioners were sometimes rather remote from reality when setting fares. I understand my hon. Friend's feeling. But the traffic commissioners have a very difficult job in coping with this inflationary era.
The two central themes of the debate were, first, the general problem of how we support buses and in what way. I should like to endorse all that my right hon. Friend has said about the necessity for subsidies. County councils were first given the power to subsidise buses in the 1968 Act by my right hon. Friend the Member for Blackburn (Mrs. Castle). That was a very important step given that subsidies for rural areas alone, forgetting all the other subsidies which go to the bus services, in the current year are expected to total £40 million. That is an increase from £34 million last year. It shows the importance that my right hon. Friend and I attach to increasing the amount of support for the rural bus services.
In addition they get support via concessionary fares, although, regrettably, in some cases some county councils have not been as generous as some of the Labour-controlled metropolitan councils. Secondly, there is the new bus grant, which still continues at a high level and, thirdly, there is fuel duty rebate.
All these four subsidies give to buses in rural areas a considerable amount of public support when they have shown that they need it. It is my hope that they can be increased even further. I recognise the point made by the hon. Member for Dorset, West (Mr. Spicer), which the hon. Member for Faversham also mentioned, about the dangers of giving subsidies. It is a point that we take on board.
But the fact is that, had we not given this level of subsidy we should have a far poorer level of bus service in rural areas than we have today. The hon.

Member for Truro said it would be reduced to shreds. He is quite right. That is one reason why we have a better bus service even today than any other country in Western Europe.
It is also the case that the level of support that the Government have given has risen substantially. Conservative Members must answer this question. Would they cut that support as part of a general public expenditure policy? We, of course, accept that subsidies are not the whole answer. The Opposition must face this issue, just as they must face the issue of bus licensing and all that that involves.
One should not overlook that one of the major improvements in bus licensing in recent years has been the 1968 Transport Act of my right hon. Friend the Member for Blackburn. I am sorry that she is not here to hear this. Section 30 of that Act allowed for the post buses and the use of school buses and all the rest about which the hon. and learned Member for Kinross and West Perthshire was waxing so eloquent. As my right hon. Friend said, the 100th post bus in Scotland has been introduced precisely because of that legislation, and that shows that that legislation can have a clear effect in this area. That development flowed from that Act.
But I accept that what we have done in present legislation is not enough in itself. This is why we are promoting the present Bill, and that is why my right hon. Friend mentioned the need for further revisions in the bus licensing law. It is something that we must take on board.
The third thing we must do is to get the NBC to undertake far more experiments and innovations. Its record has improved, as I am sure hon. Members from rural areas would agree, but there is considerable scope for further improving the way which its services relate to the needs of those who live in rural areas. The NBC provides 90 per cent. of stage carriage services in rural areas.
With regard to bus licensing, the question is posed whether we should go further down the path which the Conservative Party is indicating, especially when the problem is the declining number of passengers. Is it right to encourage further competition so that instead of one


bus carrying six passengers, we have two buses carrying three each? Is that the logical answer to a situation which has changed totally from 1928 and 1930 when the bus licensing system was introduced?
The Conservative Party must question its own methods if it is to be logical in that situation.

Mr. Moate: Mr. Moate rose—

Mr. Horam: I am just concluding.

Mr. Moate: Before the hon. Gentleman sits down I hope that he will either justify or withdraw the violent attacks that he made on certain county councils, which have now been proved to be totally unfounded.

Mr. Horam: The hon. Gentleman is quite wrong. Of course, those county councils disagree with what my right hon. Friend and I said. It is natural that they should disagree, but the facts are there. The hon. Gentleman in no way sought to question those facts. He simply interpreted them from a Conservative point of view, or an independent point of view in the case of Cornwall. But the fact is that many councils—they are predominantly Conservative councils—are not giving bus services the support that we accepted for grant purposes let alone the amount which the NBC requires to maintain the existing level of service. Therefore, Conservative Members should seek to influence their own supporters in the counties before they complain too much about the level of bus services in rural areas.
The fact is that the Conservatives have achieved nothing on bus licensing. They achieved nothing in their last Administration. The last time a Conservative Government

did anything about bus licensing was in 1956, and then there was no significant relaxation. It was all mere pettifogging, detailed stuff, hardly worthy of being put into a Road Traffic Act.

It is extraordinary for the Conservatives now to say that we are going slow, when they did nothing since 1956, although there have been three Conservative Governments since then. The debate rightly did not concentrate on those points, because it is the kind of politicking that the Opposition would be well advised to avoid.

The Conservatives have achieved nothing and learnt nothing. I am sorry that they intend to go down the same path as the right hon. Member for Yeovil (Mr. Peyton) started on so gaily in 1971. He had to abandon his approach under the pressure of events and the interests and problems that he came up against. If the hon. Member for Sutton Coldfield ever becomes Secretary of State for Transport, I hope that he will not find himself making the same painful retreat as the right hon. Member for Yeovil made. The Conservatives have achieved nothing and have learned nothing about transport, and the evidence of their colleagues in the county councils shows that they do not care about it very much.

The Opposition would be well advised to withdraw the motion, which is a piece of humbug. If they do not, I hope that the House will oppose the motion and support the record and plans of my right hon. Friend.

Question put, That Subhead A1(1) (Salaries of Ministers) be reduced by £100:

The House divided: Ayes 287, Noes 293.

Division No. 116]
AYES
[7.2 p.m.


Adley, Robert
Boscawen, Hon Robert
Channon, Paul


Alison, Michael
Bottomley, Peter
Churchill, W. S.


Amery, Rt Hon Julian
Bowden, A. (Brighton, Kemptown)
Clark, Alan (Plymouth, Sutton)


Arnold, Tom
Boyson, Dr Rhodes (Brent)
Clark, William (Croydon S)


Atkins, Rt Hon H. (Spelthorne)
Braine, Sir Bernard
Clarke, Kenneth (Rushcliffe)


Awdry, Daniel
Brittan, Leon
Clegg, Walter


Bain, Mrs Margaret
Brocklebank-Fowler, C.
Cockcroft, John


Baker, Kenneth
Brooke, Peter
Cooke, Robert (Bristol W)


Banks, Robert
Brotherton, Michael
Cope, John


Beith, A. J.
Brown, Sir Edward (Bath)
Cordle, John H.


Bell, Ronald
Bryan, Sir Paul
Cormack, Patrick


Bennett, Sir Frederic (Torbay)
Buck, Antony
Corrie, John


Bennett, Dr Reginald (Fareham)
Budgen, Nick
Costain, A. P.


Benyon, W.
Bulmer, Esmond
Crawford, Douglas


Berry, Hon Anthony
Burden, F. A.
Critchley, Julian


Biffen, John
Butler, Adam (Bosworth)
Crouch, David


Biggs-Davison, John
Carlisle, Mark
Crowder, F. P.


Body, Richard
Chalker, Mrs Lynda
Davies, Rt Hon J. (Knutsford)




Dean, Paul (N Somerset)
Joseph, Rt Hon Sir Keith
Reid, George


Dodsworth, Geoffrey
Kaberry, Sir Donald
Renton, Rt Hon Sir D. (Hunts)


Douglas-Hamilton, Lord [...]ames
Kellett-Bowman, Mrs Elaine
Renton, Tim (Mid-Sussex)


Drayson, Burnaby
Kershaw, Anthony
Rhodes James, R.


du Cann, Rt Hon Edward
Kilfedder, James
Rhys Williams, Sir Brandon


Durant, Tony
Kimball, Marcus
Ridley, Hon Nicholas


Dykes, Hugh
King, Evelyn (South Dorset)
Ridsdale, Julian


Eden, Rt Hon Sir John
King, Tom (Bridgwater)
Rifkind, Malcolm


Edwards, Nicholas (Pembroke)
Kitson, Sir Timothy
Rippon, Rt Hon Geoffrey


Elliott, Sir William
Knight, Mrs Jill
Roberts, Wyn (Conway)


Emery, Peter
Knox, David
Rodgers, Sir John (Sevenoaks)


Evans, Gwynfor (Carmarthen)
Lamont, Norman
Ross, Stephen (Isle of Wight)


Eyre, Reginald
Langford-Holt, Sir John
Rossi, Hugh (Hornsey)


Fairbairn, Nicholas
Latham, Michael (Melton)
Rost, Peter (SE Derbyshire)


Fairgrieve, Russell
Lawrence, Ivan
Royle, Sir Anthony


Farr, John
Lawson, Nigel
Sainsbury, Tim


Fell, Anthony
Lester, Jim (Beeston)
Scott, Nicholas


Finsberg, Geoffrey
Lewis, Kenneth (Rutland)
Scott-Hopkins, James


Fisher, Sir Nigel
Lloyd, Ian
Shaw, Giles (Pudsey)


Fletcher, Alex (Edinburgh N)
Luce, Richard
Shaw, Michael (Scarborough)


Fletcher-Cooke, Charles
McAdden, Sir Stephen
Shelton, William (Streatham)


Fookes, Miss Janet
MacCormick, Iain
Shepherd, Colin


Forman, Nigel
McCrindle, Robert
Shersby, Michael


Fowler, Norman (Sutton C'f'd)
Macfarlane, Neil
Silvester, Fred


Fox, Marcus
MacGregor, John
Sims, Roger


Fraser, Rt Hon H. (Stafford &amp; St)
Mackay, Andrew James
Sinclair, Sir George


Freud, Clement
Macmillan, Rt Hon M. (Farnham)
Skeet, T. H. H.


Fry, Peter
McNair-Wilson, M. (Newbury)
Smith, Dudley (Warwick)


Galbraith, Hon T. G. D.
McNair-Wilson, P. (New Forest)
Smith, Timothy John (Ashfield)


Gardiner, George (Reigate)
Madel, David
Speed, Keith


Gardner, Edward (S Fylde)
Marshall, Michael (Arundel)
Spence, John


Gilmour, Rt Hon Sir Ian (Chesham)
Marten, Neil
Spicer, Jim (W Dorset)


Gilmour, Sir John (East Fife)
Mates, Michael
Spicer, Michael (S Worcester)


Glyn, Dr Alan
Mather, Carol
Sproat, Iain


Godber, Rt Hon Joseph
Maude, Angus
Stainton, Keith


Goodhart, Philip
Maudling, Rt Hon Reginald
Stanbrook, Ivor


Goodhew, Victor
Mawby, Ray
Stanley, John


Goodlad, Alastair
Maxwell-Hyslop, Robin
Steel, Rt Hon David


Gorst, John
Mayhew, Patrick
Steen, Anthony (Wavertree)


Gow, Ian (Eastbourne)
Meyer, Sir Anthony
Stewart, Rt Hon Donald


Gower, Sir Raymond (Barry)
Miller, Hal (Bromsgrove)
Stewart, Ian (Hitchin)


Grant, Anthony (Harrow C)
Mills, Peter
Stokes, John


Gray, Hamish
Mitchell, David (Basingstoke)
Stradling Thomas, J.


Grieve, Percy
Moate, Roger
Tapsell, Peter


Griffiths, Eldon
Monro, Hector
Taylor, R. (Croydon NW)


Grimond, Rt Hon J.
Montgomery, Fergus
Tebbit, Norman


Grist, Ian
Moore, John (Croydon C)
Temple-Morris, Peter


Grylls, Michael
More, Jasper (Ludlow)
Thatcher, Rt Hon Margaret


Hall, Sir John
Morgan, Geraint
Thomas, Dafydd (Merioneth)


Hall-Davis, A. G. F.
Morgan-Giles, Rear-Admiral
Thomas, Rt Hon P. (Hendon S)


Hamilton, Michael (Salisbury)
Morris, Michael (Northampton S)
Thompson, George


Hannam, John
Morrison, Hon Peter (Chester)
Thorpe, Rt Hon Jeremy (N Devon)


Harrison, Col Sir Harwood (Eye)
Mudd, David
Townsend, Cyril D.


Hastings, Stephen
Neave, Airey
Trotter, Neville


Havers, Sir Michael
Nelson, Anthony
van Straubenzee, W. R.


Hayhoe, Barney
Neubert, Michael
Vaughan, Dr Gerard


Heath, Rt Hon Edward
Newton, Tony
Wainwright, Richard (Coine V)


Henderson, Douglas
Normanton, Tom
Wakeham, John


Hicks, Robert
Nott, John
Walder, David (Clitheroe)


Higgins, Terence L.
Onslow, Cranley
Walker, Rt Hon P. (Worcester)


Hodgson, Robin
Oppenheim, Mrs Sally
Walker-Smith, Rt Hon Sir Derek


Holland, Philip
Page, John (Harrow West)
Wall, Patrick


Hordern, Peter
Page, Rt Hon R. Graham (Crosby)
Walters, Dennis


Howe, Rt Hon Sir Geoffrey
Page, Richard (Workington)
Warren, Kenneth


Howell, David (Guildford)
Pardoe, John
Watt, Hamish


Howell, Ralph (North Norfolk)
Parkinson, Cecil
Weatherill, Bernard


Howells, Geraint (Cardigan)
Pattie, Geoffrey
Wells, John


Hunt, David (Wirral)
Penhaligon, David
Welsh, Andrew


Hunt, John (Bromley)
Percival, Ian
Whitelaw, Rt Hon William


Hurd, Douglas
Peyton, Rt Hon John
Wiggin, Jerry


Hutchison, Michael Clark
Pink, R. Bonner
Wigley, Dafydd


Irving, Charles (Cheltenham)
Price, David (Eastleigh)
Winterton, Nicholas


James, David
Prior, Rt Hon James
Wood, Rt Hon Richard


Jenkin, Rt Hon P. (Wanst'd &amp; W'dt'd)
Pym, Rt Hon Francis
Young, Sir G. (Ealing, Acton)


Jessel, Toby
Raison, Timothy
Younger, Hon George


Johnson Smith, G. (E Grinstead)
Rathbone, Tim



Johnston, Russell (Inverness)
Rawlinson, Rt Hon Sir Peter
TELLERS FOR THE AYES:


Jones, Arthur (Daventry)
Rees, Peter (Dover &amp; Deal)
Mr. Spencer Le Marchant and


Jopling, Michael
Rees-Davies, W. R.
Mr. Michael Roberts,




NOES


Abse, Leo
Armstrong, Ernest
Atkinson, Norman


Allaun, Frank
Ashley, Jack
Bagier, Gordon A. T.


Anderson, Donald
Ashton, Joe
Barnett, Guy (Greenwich)


Archer, Peter
Atkins, Ronald (Preston N)
Barnett, Rt Hon Joel (Heywood)







Bates, Alf
Garrett, W. E. (Wallsend)
Mitchell, R. C. (Soton, Itchen)


Bean, R. E.
George, Bruce
Molloy, William


Benn Rt Hon Anthony Wedgwood
Gilbert, Dr John
Moonman, Eric


Bennett, Andrew (Stockport N)
Ginsburg, David
Morris, Alfred (Wythenshawe)


Bidwell, Sydney
Gould, Bryan
Morris, Charles R. (Openshaw)


Bishop, E. S.
Gourlay, Harry
Morris, Rt Hon J. (Aberavon)


Blenkinsop, Arthur
Graham, Ted
Moyle, Roland


Boardman, H.
Grant, George (Morpeth)
Mulley, Rt Hon Frederick


Booth, Rt Hon Albert
Grant, John (Islington C)
Murray, Rt Hon Ronald King


Boothroyd, Miss Betty
Grocott, Bruce
Newens, Stanley


Bottomley, Rt Hon Arthur
Hamilton, W. W. (Central Fife)
Noble, Mike


Boyden, James (Bish Auck)
Hardy, Peter
Oakes, Gordon


Bradley, Tom
Harrison, Walter (Wakefield)
Ogden, Eric


Bray, Dr Jeremy
Hart, Rt Hon Judith
O'Halloran, Michael


Broughton, Sir Alfred
Hattersley, Rt Hon Roy
Orbach, Maurice


Brown, Hugh D. (Provan)
Hatton, Frank
Orme, Rt Hon Stanley


Brown, Robert C. (Newcastle W)
Hayman, Mrs Helene
Ovenden, John


Brown, Ronald (Hackney S)
Healey, Rt Hon Denis
Padley, Walter


Buchan, Norman
Heffer, Eric S.
Palmer, Arthur


Buchanan, Richard
Hooley, Frank
Park, George


Butler, Mrs Joyce (Wood Green)
Horam, John
Parker, John


Callaghan, Rt Hon J. (Cardiff SE)
Hoyle, Doug (Nelson)
Parry, Robert


Callaghan, Jim (Middleton &amp; P)
Huckfield, Les
Pavitt, Laurie


Campbell, Ian
Hughes, Rt Hon C. (Anglesey)
Pendry, Tom


Canavan, Dennis
Hughes, Mark (Durham)
Perry, Ernest


Cant, R. B.
Hughes, Robert (Aberdeen N)
Phipps, Dr Colin


Carmichael, Neil
Hughes, Roy (Newport)
Prentice, Rt Hon Reg


Carter, Ray
Hunter, Adam
Prescott, John


Carter-Jones, Lewis
Irvine, Rt Hon Sir A. (Edge Hill)
Price, C. (Lewisham W)


Cartwright, John
Irving, Rt Hon S. (Dartford)
Price, William (Rugby)


Castle, Rt Hon Barbara
Jackson, Colin (Brighouse)
Radice, Giles


Clemitson, Ivor
Jackson, Miss Margaret (Lincoln)
Rees, Rt Hon Merlyn (Leeds S)


Cocks, Rt Hon Michael
Janner, Greville
Richardson, Miss Jo


Cohen, Stanley
Jay, Rt Hon Douglas
Roberts, Albert (Normanton)


Coleman, Donald
Jeger, Mrs Lena
Roberts, Gwilym (Cannock)


Colquhoun, Ms Maureen
Jenkins, Hugh (Putney)
Robertson, John (Paisley)


Conlan, Bernard
John, Brynmor
Robinson, Geoffrey


Cook, Robin F. (Edin C)
Johnson, James (Hull West)
Roderick, Caerwyn


Corbett, Robin
Johnson, Walter (Derby S)
Rodgers, George (Chorley)


Cowans, Harry
Jones, Alec (Rhondda)
Rodgers, Rt Hon William (Stockton)


Cox, Thomas (Tooting)
Jones, Barry (East Flint)
Rooker, J. W.


Craigen, Jim (Maryhill)
Jones, Dan (Burnley)
Roper, John


Cronin, John
Kaufman, Gerald
Rose, Paul B.


Crowther, Stan (Rotherham)
Kelley, Richard
Ross, Rt Hon W. (Kilmarnock)


Cryer, Bob
Kerr, Russell
Rowlands, Ted


Cunningham, G. (Islington S)
Kilroy-Silk, Robert
Ryman, John


Cunningham, Dr J. (Whiteh)
Kinnock, Neil
Sandelson, Neville


Davidson, Arthur
Lambie, David
Sedgemore, Brian


Davies, Bryan (Enfield N)
Lamborn, Harry
Selby, Harry


Davies, Denzil (Llanelli)
Lamond, James
Shaw, Arnold (Ilford South)


Davies, Ifor (Gower)
Latham, Arthur (Paddington)
Shaw, Michael (Scarborough)


Davis, Clinton (Hackney C)
Lee, John
Sheldon, Rt Hon Robert


Deakins, Eric
Lestor, Miss Joan (Eton and Slough)
Shore, Rt Hon Peter


Dean, Joseph (Leeds West)
Lever, Rt Hon Harold
Short, Mrs Renée (Wolv NE)


de Freitas, Rt Hon Sir Geoffrey
Lewis, Ron (Carlisle)
Silkin, Rt Hon John (Deptford)


Dell, Rt Hon Edmund
Lipton, Marcus
Silkin, Rt Hon S. C. (Dulwich)


Dempsey, James
Lomas, Kenneth
Silverman, Julius


Doig, Peter
Loyden, Eddie
Skinner, Dennis


Dormand, J. D.
Luard, Evan
Small, William


Douglas-Mann, Bruce
Lyon, Alexander (York)
Smith, John (N Lanarkshire)


Dunnett, Jack
McCartney, Hugh
Snape, Peter


Dunwoody, Mrs Gwyneth
McDonald, Dr Oonagh
Spearing, Nigel


Eadie, Alex
McElhone, Frank
Spriggs, Leslie


Edge, Geoff
MacFarquhar, Roderick
Stallard, A. W.


Edwards, Robert (Wolv SE)
McGuire, Michael (Ince)
Stewart, Rt Hon M. (Fulham)


Ellis, John (Brigg &amp; Scun)
MacKenzie, Gregor
Stoddart, David


Ellis, Tom (Wrexham)
Mackintosh, John P.
Stott, Roger


English, Michael
McMillan, Tom (Glasgow C)
Strang, Gavin


Ennals, David
McNamara, Kevin
Strauss, Rt Hon G. R.


Evans, Fred (Caerphilly)
Madden, Max
Summerskill, Hon Dr Shirley


Evans, Ioan (Aberdare)
Magee, Bryan
Swain, Thomas


Evans, John (Newton)
Maguire, Frank (Fermanagh)
Taylor, Mrs Ann (Bolton W)


Ewing, Harry (Stirling)
Mahon, Simon
Thomas, Jeffrey (Abertillery)


Faulds, Andrew
Mallalieu, J. P. W.
Thomas, Mike (Newcastle E)


Fernyhough, Rt Hon E.
Marks, Kenneth
Thomas, Ron (Bristol NW)


Fitch, Alan (Wigan)
Marshall, Dr Edmund (Goole)
Thorne, Stan (Preston South)


Fitt, Gerard (Belfast W)
Marshall, Jim (Leicester S)
Tierney, Sydney


Flannery, Martin
Maynard, Miss Joan
Tinn, James


Fletcher, Ted (Darlington)
Meacher, Michael
Tomney, Frank


Foot, Rt Hon Michael
Mellish, Rt Hon Robert
Torney, Tom


Ford, Ben
Mendelson, John
Tuck, Raphael


Forrester, John
Mikardo, Ian
Urwin, T. W.


Fowler, Gerald (The Wrekin)
Millan, Rt Hon Bruce
Varley, Rt Hon Eric G.


Fraser, John (Lambeth, N'w'd)
Miller, Dr M. S. (E Kilbride)
Wainwright, Edwin (Dearne V)


Freeson, Reginald
Miller, Mrs Millie (Ilford N)
Walden, Brian (B'ham, L'dyw'd)


Garrett, John (Norwich S)
Mitchell, Austin Vernon (Grimsby)
Walker, Harold (Doncaster)







Walker, Terry (Kingswood)
Whitehead, Phillip
Wise, Mrs Audrey


Ward, Michael
Whitlock, William
Woodall, Alec


Watkins, David
Willey, Rt Hon Frederick
Wool, Robert


Watkinson, John
Williams, Alan Lee (Hornch'ch)
Wrigglesworth, Ian


Weetch, Ken
Williams, Rt Hon Shirley (Herlford)
Young, David (Bolton E)


Weitzman, David
Williams, Sir Thomas (Warrington)



Wellbeloved, James
Wilson, Alexander (Hamilton)
TELLERS FOR THE NOES:


White, Frank R. (Bury)
Wilson, Rt Hon Sir Harold (Huyton)
Mr. Joseph Harper and


White, James (Pollok)
Wilson, William (Coventry SE)
Mr. James Hamilton.

Question accordingly negatived.

Original Question again proposed.

Debate adjourned.—[Mr. Ashton.]

Orders of the Day — CONSTRUCTION INDUSTRY

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ashton.]

7.20 p.m.

Mr. Keith Speed: I start by declaring an interest in that I am a marketing consultant to a civil engineering group.
Of all the many groups, associations and industries which have suffered under the last three years of Socialism, none has been clobbered more than the building and construction industry and its associated professions. The President of the NFBTE, Mr. Bob Willan, in this month's National Builder magazine, says:
The building and construction industry is in a recession of the worst magnitude in living memory.
He goes on:
The building industry is angry and embittered.
That is the employers' view.
The trade union view was given by the General Secretary of UCATT at the Scottish TUC Annual Congress on 19th April, when Mr. George Smith said:
The Government's economic policy is a mass of contradictions. The Government criticises British manufacturers for failing to invest in British industry, yet by running down the construction industry, the Government is guilty of the same crime. Construction accounts for over half the national fixed capital investment. Delaying proper production and maintenance of our building stock will make a future crisis inevitable.
Thus, both sides of the industry within the last two weeks have condemned this Government's policy in the clearest possible terms—and they have much to condemn.
The House should consider the present state of the industry. Three years ago, in February 1974, there were 99,000 construction

workers out of work. Today, the figure is 220,000 which is a massive increase, not only in suffering and the problems which go with unemployment but also in the waste of skilled manpower and resources.
Construction output has plummeted by 30 per cent. since 1973 and is now significantly below the better level for the industry which was set out in the building industry's little Neddy report, published last June. Insolvencies in the industry are now running at about 2,500 a year, while the majority of those still in business find that there is great pressure on their already inadequate profit margins.
The industry's confidence has been knocked for six, and this is not confined to the builders. It extends to the architects, surveyors and engineers. The RIBA has just published figures showing that more than 2,000 architects were laid off in the last 12 months and that nearly 25 per cent. of those in private practice have had either to get new offices or to leave the profession altogether. This again is a waste of resources, skills and training. Some 600 architects at present remain unemployed. These stories can be told right across the associated professions in the construction industry.
The crisis in construction hits the material producers too. One example is the brickmakers. Average brick deliveries over the post-war years have been about 7,200 million per year, yet in the last three years the numbers have been 5,000 million, 5,500 million and 5,400 million. This year, deliveries are likely to be well below 5,000 million and the industry itself is working at only two-thirds capacity, which is most uneconomic. The story could go across the board, with cement and all the other manufacturers.
Although there has recently been a limited increase, as the Minister may be reminding us, in commercial and industrial development from what were the abysmally low levels of the last 18 months, there is little encouragement in


that. Nor do I find any encouragement in the Chancellor's recent £100 million injection, over the next two years, which was announced in the Budget. That is equivalent to half a week's work and must be seen against the cut of £57 million in the amount for the Housing Corporation budgets which were cut by the Chancellor last December.
We have the advantage of the latest NFBTE state of trade inquiry, which showed that 81 per cent. of firms are operating at three-quarters capacity or less—a 6 per cent. increase on the January figure—and that 58 per cent. of firms say that they will be employing fewer operatives on average this year than in 1976. The building material producers have forecast that there will be a 7½ per cent. drop in construction output this year and a further 2 per cent. drop in 1978.
The reasons for this deplorable state of affairs lie almost entirely with the Government. Their economic mismanagement, particularly from March 1974 to the summer of 1976, has meant more and tougher public expenditure cuts because they failed to take early and effective action. The cuts have been largely in capital expenditure and have shown the Government's political prejudice and lack of political wisdom.
Thus, we continue to spend over £300 million a year subsidising school meals and tens of millions of pounds on botched-up comprehensive schemes, while our nursery schools are not built, slum schools are not replaced and thousands of teachers remain unemployed. Blanket transport subsidies continue at a high level, while the essential road and rail capital investment is slashed and slashed again. We have heavily subsidised prescription charges for rich and poor alike and deprive the Health Service of tens of millions of pounds by phasing out pay beds while the capital programme for hospitals and clinics is further and further delayed.
Housing subsidies to rich and poor alike have nearly doubled in the last three years, yet public and private housing starts are plummeting and the number of improvement grants is running at much less than half the 1973 figure. These examples show how the Government's

distorted priorities have hit the construction industry and precipitated this crisis.
As if that were not bad enough, the industry has hanging over it and its investment plans the sword of Damocles of nationalisation. The Minister has been talking over the last 18 months about national building agencies and the extension of public enterprise. Just a year ago, "Labour's Programme for Britain' was published, which said:
We believe that a major public stake must be created within the building and construction industry.
In addition, there is the threat, currently quiescent, of the Bill to extend direct labour. It is dead at the moment, because of the present parliamentary situation, but I challenge the Minister—I hope that he will respond—to deny that a major public stake in building and construction and a major extension of direct labour organisations are still part of Labour's long-term programme. The industry would like to know, I should like to know, and no doubt the Liberal Party would like to know, the Government's policies on these two important issues.
My party is against any extension ct direct labour, for reasons which I have advanced from this Box in the past. Equally, the next Conservative Government will insist on proper and fair accounting procedures for direct labour organisations, based on the reports of the Chartered Institute of Public Finance and Accountancy, after discussions with the various local authorities. I hope that the system will be voluntary and brought in by the local authorities themselves, but we shall not hesitate to use legislation if necessary.
What should be done now to put the industry back on the road to growth and stability—something that I hope we all want to see? Clearly, the first essential prerequisite of recovery is that we achieve our own economic revival. Then we must stop the constant capital cuts and using the industry as an economic regulator, as has been done not only by this Government but, to be honest, by previous Governments as well.
Two industries in this country have been used as economic regulators for the last 25 years—the construction industry and the motor industry. It is no coincidence that both are now in a severe crisis.

Mr. Lewis Carter-Jones: Does the hon. Gentleman include the public sector in his remarks?

Mr. Speed: The public sector of what—the motor industry?

Mr. Carter-Jones: The building industry.

Mr. Speed: I am talking of the entire construction industry; where there is a public sector which has been hit, I am talking of that as well.
I have listed various items where I believe the wrong emphasis has been placed, where, instead of cutting revenue expenditure, the Government have constantly cut capital expenditure and have not had a long hard look at subsidies. This has meant that the industry has been very hard hit.
I am reinforced in that view because, as I may remind the House, the Fourth Report of the Expenditure Committee published just six weeks ago said in Paragraph 10:
The Government is thus itself acting like those industrialists it criticises for failing to invest…. It (the Government) appears to be cutting capital expenditure and selling off productive capital assets (e.g. B.P. shares) in order to sustain current expenditure, the classic action of an ailing industrial economy. The results will inevitably be felt in every public service and also particularly in the construction industry upon which unemployment is being differentially imposed".
I ask the Minister whether the Government accept that criticism of the Expenditure Committee because it is a criticism that the House ought to take seriously. I am not saying that we can solve all our problems by having no cuts in capital expenditure but that we should have some common sense and that the Government have organised their affairs and priorities so as to hit the construction industry uniquely. If we must have cuts, they should be the more sensible ones that I outlined earlier.
There should be a moratorium and a long hard look at the bureaucratic and vicious operation of the 714 employment certificates—a scheme that we debated recently. There should be a searching examination of the operation of industrial development certificates and office development permits. I suspect that both have largely outlived their usefulness and

that they have stopped investment in offices and factories in many areas of high unemployment, particularly London and, to a lesser extent, the West Midlands.
We should repeal the Community Land Act, for which there is no money anyway and on which builders and developers have made many representations to the Government regarding the Act's effect on their industry. I hope that even at this late stage we can take a fresh look at the Dobry planning procedure proposals and have a determined drive to speed up decisions on planning. I also hope that, with the help of local authorities, we can cut out unnecessary duplication and delay. I admit that some of that has arisen as a result of local government reorganisation, but that was three or four years ago and it should now be possible to arrive at a modus vivendi to cut out such duplication and delay.
We should remove the threat of nationalisation once and for all and bring in proper accounting procedures for direct labour organisations. That would do an immense amount for confidence of all involved in the industry. I am sure that the Minister understands that one of the problems is that there must be a time lag of at least 18 months before measures to revitalise the industry can become fully effective. Demand, whether for housing, commercial and industrial development or public works, should keep in step, as far as possible, with the productive capacity of the industry. We do not want a major boom resulting in such problems as overheating and the "lump" that we have seen before, but a sustained and sustainable growth. That has all kinds of implications for economic management and so on.
A strong industry is needed to sustain exports—which are now going well—to provide employment and to soak up the employment of skilled men who will be lost to the industry for ever unless something is done soon. It is needed to provide the best utilisation of men and machines, to provide resources for the research and development that is needed by the industry and its material producers, and for the industry's sustained future growth. To achieve this, we need new directions, new policies and, above all, a new Government.

7.36 p.m.

The Minister for Housing and Construction (Mr. Reginald Freeson): I do not disagree with a great deal of what has been said by the hon. Member for Ashford (Mr. Speed). He was heavy on description but not so heavy on prescription and the right answers. I shall deal as best I can in the course of my remarks. with a number of the points that he has made.
There is no doubt that the construction industry has suffered heavily in the present recession. Since the height of the boom early in 1973 its output has declined from about £6,000 million to £5,000 million a year. Employment in the industry then stood at 1,916,000. Today there are 214,000 unemployed. The general decline is serious. It is not the 30 per cent. to which the hon. Member for Ashford referred but 16 per cent. The situation is serious enough without us making further exaggerated statements on the basis of misunderstandings.

Mr. Speed: I believe that I am right about the 30 per cent. It is 30 per cent. in terms of gross domestic product by the end of the year. That was the figure used by George Smith in his TUC speech.

Mr. Freeson: I have not studied that speech in detail, but the figure that I have quoted is nevertheless right.
The building industry in Britain is not alone in its present situation. Construction industries throughout the world are suffering the worst recession for 50 years. The general economic recession is not the only cause of the downturn in building in Britain. It is the consequence, too, of the unhealthy over-heating of the industry deliberately stimulated by the last Government during 1971–73.
There are other causes that lie within the industry itself. Many of the closer contacts that I have established with the industry during the past three years have been in order to consider how to cure some of its own inherent weaknesses. These weaknesses have contributed to the difficulties in a generally difficult time.
Traditionally the industry has been plagued with poor industrial relations. This is largely caused by the casual nature of much of the employment and by the feelings of alienation that arise from the law of the jungle that has

characterised much of the industry for so long. Our measures to restrict the abuses of the "lump" and proposals that I hope will come from the Construction Industry Manpower Board will reduce some of the problems caused by the system of casual labour.
But it is only a step in the right direction. Efficient working relations will come about ultimately only if workers in the industry have a stake in management and ownership. By that I do not mean nationalisation. There are many ways of mutualising by establishing common interest through partnerships and common holding schemes without going along the road to which the hon. Member for Ashford referred and which has been advocated in some quarters.
One of the major structural weaknesses of the industry has been its chronic under-capitalisation. This has accentuated the pressures caused by the sudden drop in demand. It is a matter which requires the closest study. More needs to be done, but a start has been made.
The problems caused by variations in demand and ways to resolve them are now being studied jointly within the industry. The Building and Civil Engineering Economic Development Councils have tried to establish the implications for the industries of possible levels and patterns of demand in the early 1980s. A report on this was published last year.
The Structural Analysis Committee is now examining the way that industries operate. It will prepare a quantified description of the resources needed by the various sectors of the building and civil engineering industries, assess the ability of the industries to respond to changes in demand, and, based on these analyses, recommend methods to achieve more efficient use of resources. This approach to the difficult but vital subject of demand management will provide an essential basis for trying to stabilise work load, which is so important for the longer-term health of the industry.
The Building Economic Development Council has also established a working party to examine efficiency in the house-building industry. Studies by my Department's Building Research Establishment


and by the joint local authority—Department of the Environment Action Group on London Housing have shown the nature of the problems and the side of the potential savings to be made through increased efficiency in the public sector—savings that can be put into investment. Following consultation with me, the local authority associations have set up a working party, in which we are represented, to examine the ways to improve development management.
More generally, I have asked my Department to study how existing information about improving efficiency and value for money in the construction industry—at present scattered around in a dozen studies—could be drawn together to get speedy practical application. I attach much importance to this because savings in this direction provide more resources for investment.
Because of the diffuse nature of our construction industries and some of the other weaknesses that I have mentioned, they have tended to be treated as outside the main stream of industrial development and policy. In the past this has been the attitude of both the Government and the industry. It must no longer be so.
The industries are basic to our economy. They underpin every economic and social activity—factories offices, shops, roads, power stations, reservoirs, oil-rigs, hospitals, schools and homes. The list seems inexhaustible. Nothing that we do would be possible without the industry being involved.
Because of this basic position, the construction industries must be part of the industrial strategy of the Government, TUC and CBI. The industry is being linked to the industrial strategy through the working parties under the NEDC. Each working party has been instructed to define the likely demand for construction as industry is regenerated and the construction EDCs have work in hand to identify the benefits of industrial building for the construction industry and of encouraging orders for construction investment to be brought forward.
Our economy is passing through a great crisis. It will recover and will be reinvigorated as a result of the strategy and programmes to which I have referred. However, none should pretend that the reshaping of our economy is going to be

easy and speedy, whatever strategy or formula is advocated. And none should pretend that the reshaping will not leave some big problems still to be resolved. Not the least of these will be future levels and the nature of employment. This will be true of the construction industries, as of others.
The representations that I have received from representatives of the building industries have naturally been concerned with immediate problems of demand, but the present situation should bring into sharp focus the impact of underlying economic changes on our construction industries.
Demand on the industry will undoubtedly rise again, but we should not assume that it will ever reach the level and nature of the boom of 1971 to 1973. Both the scale and the nature of demand and how it is met will be different.
Social, economic and technological factors may point to a different size and shape to the industries in the next 10 years. Needs and resources are changing along with changes in demography, life styles, demands and urbanisation. All these will influence the amount, the nature and the quality of construction likely to be undertaken.
One thing is sure: despite some romantic and reactionary ideas to the contrary that I gather are not held by the hon. Member for Ashford, though they are held by some of his hon. Friends, the industry depends and will continue to depend as much on public investment and its multiplier effects as on the private market for it success.
At least half the industry's basic work is provided by public sector clients—the Government, local authorities, nationalised industries and other statutory bodies. Indeed, Government action in cutting public construction works has worsened the effects of the recession on the industry, particularly in the July and December cuts last year.

Mr. Arthur Jones: The right hon. Gentleman is essentially concerned most with the housing programme. I recognise that he has touched on the important question of capital expenditure on housing, but he has painted the scene with a broad brush and I want to get back to the area in which he has particular responsibility.
The right hon. Gentleman referred to the fact that the construction industry is dependent upon the capital programme of the Government. It must have been difficult and disappointing for him to see the housing programme substantially cut. Does he agree with my view that this is attributable to the fact that we have had to much expenditure on current account housing instead of on capital account? Does he think that it is now time to review the priorities?

Mr. Freeson: I do not intend to go over ground that was discussed at length in the housing debate last week and will no doubt be covered in future debates. I shall be touching on housing matters, but I was not aware that I had so far done so. The hon. Gentleman is jumping ahead. The housing programme is an important element in the scene and I shall be dealing with it later. I have some important points to make about that aspect of construction, both in the private and in the public sectors.
I was referring to the impact of cuts in public investment on housing and the massive dependence of the construction industries on public sector clients. We should accept that fact instead of constantly knocking it. I do not accuse the hon. Member for Ashford of doing that, but his emphasis is rather different from that of his hon. Friends the Members for Henley (Mr. Heseltine) and Hornsey (Mr. Rossi) in these matters.
As part of the arrangements for the IMF loan, the Government had to reduce capital spending last December by £700 million. This was a cut in the real level of spending, following earlier cuts of more than £600 million in prospective future growth. This was the first time that we had cut into the actual level of spending.
This action was considered essential to preserve the economy. Hard though it is for the industry to bear, in time—and perhaps in all but the very short term—the construction industries will benefit from the success of the Government's policies as the national economy—of which the industries are so fundamentally a part—is regenerated.
The Government are under no illusions about the impact that their decisions on public expenditure have had

on the industry. While we direct our polices to the future—whatever this may mean in temporary unpopularity—we shall also use every opportunity to re-create resources for construction where they can best meet economic and social priorities and provide work for the industry.
In discussing the relationship between capital and revenue cuts, I am not saying that there are no valid areas for argument or shifts of emphasis here, but we should avoid presenting it as a black and white picture, because revenue cuts also have major employment implications which had to be taken on board by the Government in preparing the balance of the package announced by the Chancellor of the Exchequer in December.
I hope that we may have the support of the Opposition in saying that we need to provide a re-creation of public investment in this field whenever the opportunity presents itself. I gather that we may have the support of the hon. Member for Ashford, but I am afraid that our hope may be vain in the case of his fellow Front Bench speakers and many hon. Members on the Back Benches opposite. They have done little but clamour for more and more massive reductions in public expenditure—without any apparent awareness of the likely consequences for the construction industry.
At a recent conference held by the National Federation of Building Trades Employers, the hon. Member for Henley, who leads for the Opposition on these matters, was reported as saying:
The Conservatives do not believe in any increase in public spending.
I am informed that the message was repeated by the hon. Member for Hornsey at another gathering more recently.

Mr. Hugh Rossi: On that occasion I made a clear distinction between cuts in capital expenditure and in revenue expenditure. One is investment in our future, but there is no sense in squandering money in places where it could be saved.

Mr. Freeson: I shall return to that point. I listened with great care to the hon. Member for Hornsey and I recall his refusal to answer questions on these and related matters in the debate on housing last week and on previous occasions. His intervention today was not


warranted. I was not talking about whether the hon. Gentleman favoured this cut or that cut. I was pointing out what was said by the hon. Member for Henley—repeated, I believe, by the hon. Member for Hornsey—

Mr. Rossi: Not by me.

Mr. Freeson: I was saying that the Conservatives do not believe in any increase in public spending. Does not the hon. Member for Hornsey agree with his hon. Friend the Member for Henley, who spoke on behalf of the Opposition, indicating what the Conservative Party's future policy for the construction industry would be? I understand that that was the purpose of the meeting with the NFBTE.

Mr. Rossi: The Minister must take these quotations in context and see all these things as a whole.

Mr. Freeson: I shall not read the whole of the speech made by the hon. Member for Henley. I have the documents in this red file here.

Mr. Ronald Atkins: Does my hon. Friend recall the squandering of money by the Opposition in 1972–73, when millions of pounds were spent on the cleaning of buildings? They printed the money, of course.

Mr. Freeson: We are still suffering from that today. I can understand the sensitivity of the hon. Member for Hornsey on this matter. He reflects the confusion and uncertainties of the whole Opposition on these matters, as I shall show.
The view that I outlined was the position taken up by the Opposition's leading spokesman, the hon. Member for Henley, which was confirmed by the hon. Gentleman in the House in the debate on the Government's rate support grant proposals, when the hon. Gentleman said that we should reduce public expenditure on a more significant scale.
We are never told clearly what the Opposition have in mind, although we were told slightly more clearly today by the hon. Member for Ashford. Would it be of the order of another £500 million that they want to cut, or £1,000 million? Perhaps this will be clarified during the debate. But I shall gladly give way if the hon. Member for Ashford or the hon.

Member for Hornsey would like to enlighten the House on this point, otherwise we shall have to listen carefully to the closing remarks of the hon. Member for Hornsey.
Let me tell the Opposition what would be the result of such a policy if they were to translate it into action or if we were to adopt the policies that they advocate. The result would be to increase unemployment by another 50,000 or more people in the construction industry.
The Opposition's housing policies would seem to indicate a large reduction in public sector house building. They have given the clear impression that they would wind up new house building on any substantial scale by local authorities. When my right hon. Friend the Secretary of State and I invited the hon. Member for Henley and the hon. Member for Hornsey to deny that this was their intention in the debate on housing on 21st April, and on previous occasions, they ostentatiously declined to do so. The construction industry can draw its own conclusion from that.
For every £10 million cut from this sector—that is, investment in housing construction—about 1,100 building workers and 600 others in related industries would lose their jobs. We have been here before. By the end of the Tories' last period of office, private sector housing starts had slumped to the appalling level of 106,000. As a result of a mortgage famine created by a feckless monetary policy, the industry could not even sell those houses it had already built; 56,000 of them were unsold when we came into office in 1974.
It was this Government which rescued the private sector. First, we provided for local authorities to purchase a large number of these unsold homes. Then we stabilised the supply of mortgage funds—first by lending the building societies £500 million to see them through the immediate crisis; then by developing more permanent stabilisation arrangements with the Building Societies Association. Despite difficulties caused by the volatility of interest rates last year, mortgage lending remained fairly steady.
If the laissez-faire policies of the Opposition—repeated even more vigorously in the housing debate last week in regard to the Government's relationship


with the Building Societies Association—had prevailed, the private sector would have faced the same sort of slump, as a result of mortgage famine, as it experienced in 1973 and 1974.

Mr. Rossi: I know that the Minister wants to be fair and does not want to mislead the House. Does he not recall that when he entered office these arrangements for stabilisation and the £500 million loan had all been brokeraged by us before we left office?

Mr. Freeson: I know perfectly well that the precise opposite happened. The hon. Member for Hornsey is getting very sensitive this evening. The quality of his interventions does not justify their frequency. When we came into office—and before we came into office—we were challenging the right hon. and learned Member for Hexham (Mr. Rippon) on this point, but we never got satisfactory answers. What was called the Joint Advisory Committee was set up, but it did not produce the stabilisation arrangements nor the £500 million. We inherited the prospect of 13 per cent. mortgages, a prospect that had been hanging around since the previous October, after interest rates had risen from 8 per cent. a short time before. The memory of the hon. Member for Hornsey is inaccurate.

Mr. Rossi: The Minister is misleading the House.

Mr. Freeson: Before the hon. Member for Hornsey talks about misleading the House he should study the facts. After we came into office housing starts rose from 106,000 in 1974 to 150,000 in 1975 and 155,000 in 1976. Despite the caution which house builders felt during the brief period of very high interest rates earlier this year—or the changeable interest rates earlier this year—confidence is reviving, and as the latest private enterprise housing inquiry, published by my Department today, shows, private house-builders expect to start 145,000 houses this year. This is a very different prospect from the scaremongering figure of 100,000 or less which some hon. Members opposite were proclaiming in the House at the beginning of the year, with the full support of the hon. Member for Hornsey and others.
Public sector house building tells the same story. In 1973 starts were down to 113,000 and, had the Tories stayed in office, were scheduled in their expenditure White Paper to fall below 100,000. The Labour Government have raised that level to about 170,000 in 1975 and in 1976, in co-operation with many very active local authorities throughout the country and the growing housing association movement. This year we have budgeted for about 150,000 new public sector homes. Those are figures for new buildings, apart from any rehabilitated homes. That figure will be achieved only if all authorities observe their duty to provide homes for those in need. But I am afraid that there seem to be a number of Conservative authorities in housing stress and pressure areas planning to cut back or stop their house building programmes. I hope they will think again.
If hon. Members on the Conservative Front Bench are so concerned to maintain a high level of house building, I invite them to advise their colleagues in local government to think again. If they do not, those in housing need and the house building industry will know how to judge their policies.
House building is a very important part of construction activity. It constitutes over 40 per cent. of output by value. This Government's efforts, first to stimulate and then to sustain it, have had an important and beneficial effect on demand in the construction industry.
We have similarly sought to encourage the provision of buildings for industry. New orders in this sector—the hon. Member for Ashford was kind enough to make a brief reference to this—which in recent years had been declining, showed encouraging signs of picking up last year. This trend will soon be shown in the output figures, and the Government's policy, through the industrial strategy, to switch resources into industrial investment will reinforce the growth in construction activity in this important field.
Altogether, nearly £5,000 million of public investment is going into construction work in 1977. That is no mean figure in the middle of a major economic crisis, though it is much lower than is desirable to meet our needs generally, and those of the construction industry in particular.
All the more important is it for us, therefore, to take every opportunity within our present constraints to help the industry at its most critical points, to help it to meet the upturn in demand which will accompany our economic recovery. Hence, the series of measures studied and acted upon by the Government.
We have taken measures to ease the most acute pressures of unemployment in the industry. During 1975 and 1976 we provided an extra £110 million to local authorities for renovating substandard homes. In the recent Budget we announced an extra £100 million for construction projects in inner city areas.
We have authorised loan capital of £25 million, which has been negotiated from a bank, to help Housing Corporation work. I expect this figure to be increased to £50 million in the coming months, which will offset the shortfall of which the hon. Member for Ashford complained, coming as a result originally of the cut in public expenditure for housing associations in December.
More recently, my right hon. Friend the Secretary of State for Industry announced a new programme of advance factories costing about £14 million, the eighth such programme in 2½ years, producing starts on nearly 240 factories about the country.
Today, I am pleased to be able to announce that the Government have decided to allocate a further £30 million to local authorities and housing associations for improvement and renovation of substandard housing this year, to reduce unemployment in the construction industry—this being among the most labour-intensive of building work. This has been made possible because, with the fall in interest rates, we are able to budget for a somewhat smaller provision for housing subsidies this year.
We shall be getting in touch at once with the local authorities and the Housing Corporation about the allocation of this provision. We intend to concentrate it as much as possible on basic improvements and in areas where housing conditions are most pressing.
These resources taken together—I have just given a brief summary of them—will provide jobs for about 20,000 people in the construction industry, and somewhat

more if one takes in the related industries.
There are other measures which we are actively stimulating which depend upon initiatives from outside as well as inside the Government. I have already mentioned some success in getting capital from financial institutions into housing investment. Our industry is not so well structured for this kind of thing as some of its opposite numbers on the Continent. Nevertheless, there is unused potential to date.
I mention, for example, sponsored down-market owner-occupation. House builders could finance building in conjunction with building societies and local authorities to provide housing on some of the latters' unprogrammed land for local authority nominations. Other schemes could be similarly financed on some housing association land outside stress areas. There may be scope for pension funds to finance some housing on short-term lending.
Developers with resources available might consider carrying out some industrial projects on deferred payment or lease and lease-back arrangements.
Improved efficiency in management and maintenance could provide for more repair work, which is labour-intensive, to be carried out. Both private and public authority landlords could provide for co-partnership arrangements with tenants to enable the latter to invest some of their own resources on a stake-holding basis in their property. Building societies might increase further their lending for home improvements.
Most important, we need to look to greater efficiency ahead of the results of the special studies which the Government have helped to sponsor. There are two fields in both the private and the public sectors which in time could produce several hundred million pounds of savings to go into investment and work.
About £300 million is wasted each year by inefficient site management alone, and about £300 million might be saved by more efficient development management—a total of £600 million or thereabouts which could be going into investment in work and jobs.
Those are an indication of the kind of self-help and partnership between the


industry, public agencies and other interested bodies which I consider to be of vital importance during the present crisis and for the future.
There is no short-term palliative which could dramatically increase demand and solve the structural problems of the construction industry any more than there is an easy road to economic regeneration generally in our country. For the Opposition to suggest otherwise this evening or on any other occasion is to offer a false prospectus to the industry, which I trust will not fool anyone.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): In the previous debate, which also was brief, the restraint shown by the House enabled 12 Back Benchers to speak. I hope that we shall be able to achieve a similar result in this debate.

8.5 p.m.

Mr. A. P. Costain: Your hint is well taken, Mr. Deputy Speaker.
I have spent the whole of my life in the construction industry and, after nearly 18 years in the House during five of which I served as Parliamentary Private Secretary to the Minister of Public Building and Works and the Secretary of State for the Environment, I think that I can claim to have seen the industry in both construction work and house building in most of its phases.
I believe that this is the first debate on the industry that we have ever had, and the speech which we have just had from the Minister for Housing and Construction was the most extraordinary I have ever heard about the building industry. It was full of platitudes and talk of committees. Obviously, the right hon. Gentleman thinks of the construction industry as the building industry, not as the construction industry. As I say, we had platitude after platitude and talk of committee after committee, with, at the end of it all, £30 million produced out of the hat to keep the House of Commons quiet this evening in the hope that it will not vote in favour of adjourning.
After my years in the industry, I feel that a proper description of its record and what Socialist Governments have done would require the writing of a book. However, after your appeal, Mr. Deputy

Speaker, I shall content myself with just a few words.
We must first appreciate that the most successful period for the industry was in the years 1962–64, the period at the end of 13 years of Conservative Government, when the industry had reasonable assurance and confidence for the future. That was the situation then, and I recall that in the first hour or so after the Queen's Speech in 1964 I made a speech myself on the subject. I do not suppose that anyone has read it since, but I shall remind the Minister of what I then said.
At that time I pointed out how efficient the industry had become, but I warned that from then on it would deteriorate so long as we had a Socialist Government. It always does, because Socialists always want to introduce more controls and more committees, and they take quite the wrong view of the industry.
It should be remembered that at that time we had had a Minister of Public Building and Works in the Cabinet in the person of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). He was the only Minister of Works that we had ever had in the Cabinet. No one need look surprised at that. The record will show that I am correct.
As time went on, we pointed out what happened over the Land Commission Bill. We pointed out what had happened as a result of controls. Here I must give Lord Pannell, the ex-Minister of Works, credit for what he did. He broke an all-time record. With all the committees and all the planning, he produced the biggest stock of bricks in the history of this country—1,000 million bricks in stock—and the brick makers have never quite recovered from it since.

Mr. Rossi: Is my hon. Friend aware that the present Government are closely approaching that record at the moment?

Mr. Costain: It would not surprise me in the slightest. It surprises me, in fact, that the brick industry has the confidence even to make enough bricks with all the Socialist planning that goes on.
But let us be constructive. The Minister said that half the building industry depends on controls and depends on public expenditure. Of course it does, so long as the Government continue pressing


the nationalised industries into service. Of course it does, so long as they bring in more controls. The industry cannot stand on its own feet if the Government constantly bring in more controls.
In 1959 I made an offer in the House to the then Labour Opposition that if they would undertake not to bring in more rent control, if ever they had the opportunity, I would undertake, as chairman of a company, to produce 5,000 flats a year, which was what we had been doing. Following that debate I received letters from six or seven company directors who said "Albert, if you do that, by gosh, we would, too". That would have produced about 15,000 flats a year. By now we should have built nearly 1 million flats and the housing problem would have been solved.
We should consider why we now have empty office blocks. It is because controls prevent the industry from developing in the way it wishes. They prevent the industry from building where it wants to build and where the client wants a factory or a house.
The Minister said that he was worried about the inefficiency in site planning. That is the worst sauce that I have ever heard. The Minister does not appear to be listening to me. I hope that he will at least do me the courtesy of listening. Does he realise that public accounts have shown up genuine inefficiencies? Factories and hospitals that were supposed to cost £14 million actually cost £40 million. The main reason for that is that architects have not had proper client instructions. Architects' plans have been ineffective.
The hon. Member for Liverpool, Walton (Mr. Heffer) has an interest and has had a long career in the building industry. If one were to ask him the number of sites on which he has operated where brickwork has been erected only to be knocked down, he would confirm that it is not wrong site management but wrong design and equipment planning that cause the problem. I appeal to the Minister in his calculations and efforts to help the industry to recover—as he says it will one day—to get architects in on the planning. Many architects are out of work.
The Minister and his Department believe that one can turn on the tap

in the building industry like a water tap. But it takes about three years from the date of deciding to build to complete a construction. That is why the Minister and all other Socialist Ministers always get the figures wrong. They always say that when the Conservative Party is in power the industry becomes overheated and that when they are in power they get on with the job. They are able to do that because they have a flywheel going and the houses are already planned. [Interruption.] The hon. Member for Houghton-le-Spring (Mr. Urwin) may laugh. In 1964 another hon. Member laughed when I warned what would happen. It has happened.

Mr. T. W. Urwin: I apologise for laughing, but the hon. Member is bordering on stupidity when he talks about Governments coming into office and benefiting from the planning of their predecessors. Perhaps in his long, rambling speech, the hon. Member will tell us on an annual basis which Government built most houses between 1964 and 1974.

Mr. Costain: If the hon. Member does not know that a house is built three years after it is planned, he can know nothing about the building industry.

Mr. Urwin: I have worked in the industry for 50 years.

Mr. Costain: The hon. Member has not learned much if he thinks that a house can be completed within a matter of weeks of being planned.
During my life the industry has lone much towards the development of civil engineering construction work abroad. My company has taken a lead and has made a tremendous contribution to the balance of payments. The Minister must argue in the Cabinet—bored as he looks—that if we want to increase our export potential, we must have a home base—the same applies to the motor car industry. He must also realise that there must be tax concessions for management and workers who go overseas. We have made some progress in that direction, but not enough.
I speak for a company which has developed in about 30 countries. The Minister must recognise and the industry must realise that to start an operation


in another country always means a loss. I have never started a development abroad that has not lost at least 10 per cent. on its first contract. One cannot move into another country and know more than the locals. American companies do not have immediate success when they develop in this country.
The Minister must use all his influence with the Foreign Office to achieve better communications between the embassies and his Department. Communications have improved in recent years. For instance, in 1938 I told an ambassador that my company wanted help to build a railway in his country. He told me that we must be fools and that he would not help because it might destroy his reputation.
The Minister must realise that as long as industry is under such control it can work only with Government money and intervention. If the Government were prepared—as they should be—to release controls over the industry, companies could get on with the job and help to bring back high employment.
During the depression of the 1930s my company built a block of flats at Dolphin Square. That has helped to ease the housing shortage. We built it because we knew that we were in a great depression. We had to keep our staff together and be ready for the upsurge. We cannot do that today. Because we were able to build then, we have developed abroad and helped the balance of payments.

8.17 p.m.

Mr. R. E. Bean: I found the hon. Member's reminiscences interesting, but I am more concerned about the present and future of the construction industry. Many statistics will be bandied about, but we all agree that the industry is suffering one of its most serious recessions this century.
There was a difference of opinion about the contribution of the industry to the gross national product between the hon. Member for Ashford (Mr. Speed) and the Minister. The hon. Member for Ashford quoted Mr. George Smith, the General Secretary of the Union of Construction, Allied Trades and Technicians. Mr. Smith was talking about making forecasts to 1978. By then it is expected that the construction industry's contribution to the

GNP will have fallen by about 30 per cent. Another forecast is that there will be about 300,000 building workers out of work. If one adds to that another 40,000 workers employed in the building supply and manufacturing industries, about 22 per cent. of the unemployed will come from the construction industry.
The emphasis of the Government's industrial strategy is on increased production and efficiency. The Building National Economic Development Council, in its report published in June 1976, said that the industry was already operating at a dangerous level. Since then it has declined even further. Although a major emphasis is on export-led growth, we are also concerned about import substitution. If the decline continues, many building manufacturers will go out of business. That will result when the upturn comes in more imports of ironmongery, kitchen equipment and so on, and we shall suffer from more competition from abroad.
Another problem that worries me is that in the past two years some 3,000 building apprentices have lost their jobs. Although the Construction Industry Training Board has made valiant efforts to find jobs for these youngsters, at present some 950 youngsters do not have opportunities to complete their training. Some 301 have already left the industry. That is not good for the future. What is even more disturbing—although I do not have the latest figures—is that the trend is increasing. I suggest that the Government shoud treat this matter as one of urgency, to find how we can keep these youngsters in the building industry, because we shall depend on these young men as the craftsmen of the future.
Mention has already been made of the the fact that 50 per cent. of the work load of the construction industry comes from the public sector. The latest projections show that the public sector borrowing requirement will be nearly £2,000 million less than expected. Surely now is the time for second thoughts about restoring some of the savage cuts in public expenditure that we have seen over the last year or so. If the Government were to take positive steps in this respect, I am sure that that would have immediate effect on housing and the unemployment situation. Such a step would have some influence on the TUC, which is trying to reach agreement with


the Government on phase 3 of the incomes policy, and, if the Government are sincere in their efforts, I suggest that solving part of the problem of unemployment is one way of influencing the success of the current negotiations.
Mention has been made tonight of the fact that it takes up to three years after the touch on the brake or on the accelerator for the finance to work through to the building site. The Minister has said that one way of speeding up work on the sites is through rehabilitation of old buildings. I welcome the pledge that he has given tonight that some £30 million will be put into this sector. But it is a drop in the ocean.
I would welcome further investigation into a modern phenomenon. Over the last 15 to 20 years, many multi-storey buildings have been built of concrete. This has caused condensation problems. I have made inquiries of the Building Research Centre and other bodies. I find that this problem applies throughout the country. Councils up and down the country are telling tenants that the only way to overcome the problem of condensation is by increasing heating and ventilation. People are told to increase their heating in this energy-conscious age. That is not the way to treat this problem.
When a person in a multi-storey flat, 10 or 12 storeys off the ground, is told by a council rent collector that he must leave windows open night and day to get rid of the condensation problem, what will mothers think? In my constituency there are several tower blocks, in which all day long mothers keep windows locked and barred for their children's safety. In order to tackle the problem people must have increased insulation together with more efficient ventilation and heating systems. If the Government are serious about trying to get immediate work into the industry, that is another sphere worthy of examination.
The Minister said that rehabilitation is the quickest way of getting results, and it employs about 150 men for every £1 million of capital expenditure. New building, in contrast, employs 100 men for every £1 million of expenditure. However, both are needed if we are to ease the employment situation.
I welcome the Minister's pledge that he will be keeping an eye on those councils, especially those in housing stress areas, that do not keep up to their programme. I am sure that he will have the support of the House if he brings in legislation to take away their authority if they are failing to do their duty.
When the Building Economic Development Council met my right hon. Friend the Secretary of State for the Environment recently, a number of proposals were put by the Building NEDC to increase the work load on the construction industry. Some of these proposals were rejected out of hand because of the excessive cost, but I think that others were worthy of further consideration.
If the Government are serious about their industrial strategy, they should give further consideration to the possibility of giving financial help to the building of factories outside the development areas, because in some parts of the country there are high points of unemployment. London, for instance, has unemployment figures way in excess of the national figures. I see no reason why money should not be encouraged into these areas to build these factories ahead of demand.
In my constituency we have a 7 per cent. unemployment rate. That is low, perhaps, as compared with some areas, but, nevertheless, we are above the national average. An engineering factory there is to move half of its work to the North-East. It is doing that because it is getting a firm Government grant. It seems pointless to take this work away from my area, which has a 7 per cent. unemployment rate, to an area where there is a 9 per cent. unemployment rate, when, purely because it is a development area, it is getting the grant when my constituency is not getting it. It does not make sense.
Greater co-operation could be engendered between the Building NEDC and the Government if the Building NEDC were to take cognisance of the Government's policy. Of course, on the rehabilitation of inner city areas, if the Building NEDC came forward with some proposals on how private enterprise could play its part in giving social and economic benefit to the inner cities, it would get greater co-operation from the Minister.
The Minister has already mentioned the chronic under-capitalisation that exists within the construction industry. I suggest that this is unique to this country. On the Continent one finds that most large contracting firms are supported by the major financial institutions and banks. This is a great help, because it means that they can have continuity between the booms and slumps that all construction industries experience, and it is particularly useful when it comes to exporting overseas, because it means that our foreign competitors in Europe—France and Germany—do not have the bother that we have of getting performance bonds.
One finds on the Continent that the banks back the companies, whereas in this country there is no contact between the major financial institutions and the major contractors. That is something that perhaps the new committee that has been set up under the chairmanship of my right hon. Friend the Member for Huyton (Sir H. Wilson), which is looking into the functions of financial institutions, could examine, and perhaps we could look at whether the City is supporting the construction industry as it should.
The Government must recognise the contribution that is made by the construction industry to the social and economic life of this country. The Government must also realise their responsibility to the industry. By cutting back public expenditure as they have, they are slowly starving the industry to death.

8.28 p.m.

Mr. Walter Clegg: I enjoyed the contribution that the hon. Member for Rochester and Chatham (Mr. Bean) has just made. It showed his knowledge of the industry and the problems that it faces. In my view, it was much more constructive than the approach of the Minister, whose speech was particularly arid. I am not sure whether my view was not shared by certain Labour Members.
I want to argue on this occasion from the specific to the general and to refer first to the situation in my constituency and in the North-West generally. The building industry is particularly important in my constituency—and the construction industry generally—because it is a

source of skilled jobs. Those are rather scarce, especially from young boys leaving school. Any downturn in the industry has, therefore, a very severe effect indeed in my constituency.
The situation now is that at the last count, on 12th April, there were 349 construction workers unemployed in the whole of the Fylde. The job centre tells me that that is an underestimate because the figure does not include those who were construction workers but who have had an intervening job. Thus, the true number of unemployed construction workers in the Fylde at the moment is about 534. On the other side of the picture, on 12th April there were six jobs available in the construction industry.
The hon. Member for Rochester and Chatham stressed the importance of apprentices entering the industry. The latest information I can find for the whole of the Wyre district, which includes all of my constituency, shows that there was one person apprenticed in the period from 1st October 1976 to 31st January this year. In the autumn 600,000 school leavers will come on to the labour market. We can see the tremendous problems these youngsters will face. In the North-West generally—and I know that the hon. Member for Liverpool, Walton (Mr. Heffer) takes a great interest in this area—there were about 29,500 construction workers unemployed in February. This represents about 15 per cent. of the labour force in the industry in the North-West. It has to be remembered that these are skilled jobs.

Mr. Carter-Jones: Is the hon. Member aware that many people are concerned about the loss of apprentice opportunities in the construction industry, which is directly related to the growth of the "lump"? Could we have the hon. Member's views on that?

Mr. Clegg: I have always taken the point—the hon. Member for Liverpool, Walton has often made it— that one of the drawbacks to the "lump" system is that it does not provide for apprentice training. That is a fair point. The "lump" has suffered equally with other areas of the industry. Certainly it is fail to say that "lump" working does not encourage apprentices. They are the


beneficiaries of those firms who take in apprentices and provide skilled work.
Those are the basic statistics of the situation in the North-West. In that area the construction industry has a higher share of skilled jobs than is perhaps the case in other parts of the country. That factor makes it important that we get the skilled men we need in the future. The situation is of interest to firms in the area which are operating overseas projects. Without a sound home base, without the ability to train people to sell their skills abroad, these firms will not be able to keep up their work which they are now winning in competition with other firms overseas.
That is the extent of unemployment. No one can say that there is a magic wand which, when waved, will put things right overnight. That is beyond the bounds of possibility. Even if there were a sudden massive injection of capital it would take time to work its way through.
The Minister criticised Conservative Members for deriding the contribution of the public sector to the construction industry. I would never do that. It has to be accepted that, whether at national or local level, the Government are one of the industry's biggest customers. Certainly any cutback in the rôle of the public sector as a customer would have undesirable effects. I cannot imagine a situation in this country, under whatever system of government, in which the construction industry was not dependent on the public sector for a great part of its work. It is beyond the private sector to do many things which the public sector can do.
One of the greatest stabilising factors—and this does not lie within the power of the Minister's Department—would be the introduction of reasonable and stable interest rates. The Minister said tonight that the £30 million he was able to use for the repair of houses was available because of a reduction in interest rates. A Government policy which could give us stable and reasonable interest rates would have two effects. First, it would help the customer on whom the industry relies. Secondly it would enable the entrepreneurs within the industry to take the risks which will be necessary to get it moving again. I attach high priority to keeping down interest rates ove ra period of time.

Mr. Nicholas Winterton: A few moments ago my hon. Friend mentioned the public sector. He was right in saying that the public sector awards a great percentage of the contracts won by the construction industry. Is he aware that private enterprise construction firms are often put at a disadvantage because the public sector, for which they do the work, is slow in paying its accounts—I refer to local government and Government Departments—and as a result private firms are being harassed by the Inland Revenue and the Customs and Excise because of late payment of PAYE NIC and VAT?

Mr. Clegg: Indeed. I have had similar complaints from the industry.
Much has been said in the debate about the resources available in the public sector. I do not attribute the entire blame to the Labour Government for the consequences of cuts. The same happened under Conservative Governments. When capital cuts are being made there should be some differential between ordinary projects and capital projects sponsored by national or local government which have an industrial base—for example, the building of advance factories, the provision of infrastructure to improve towns and cities, especially in the North, and the building of roads. These projects serve the economy. Cuts related to these projects must be viewed differently from cuts across the board. Capital projects should have preference because they increase industrial efficiency.
The Minister said nothing about the future of the Bill concerning direct labour. The construction industry needs that Bill just as it needs a hole in the head. Such a Bill would merely provide competition for firms which are struggling desperately to survive.
Anybody with knowledge of the system of ECGD guarantees for work done abroad knows only too well that foreign Governments are asking for increasingly heavy guarantees, undertakings and bonds. The industry does not regard the present arrangements as fully satisfactory.
The planning branch of the Department could play a part in helping the construction industry. For a long period the time taken for planning decisions to be made has been almost a scandal. I have protested about delays which have


occurred under the Conservative Government and under this Government.
I will give one example which affects my firm. I declare an interest. I am a solicitor. My firm acted in an inquiry. The Minister called in the planning application in February 1974. There was a public inquiry in July 1975. We still have not had a decision. As I am involved in the matter I will say no more about it than that that delay is remarkable in its length.
Long delays in planning matters put out of gear the programmes of contractors. This leads to decasualisation if there is not an even flow of work over the years. The consumer must ultimately shoulder every additional expense in the form of increased charges and interest on money borrowed while the developer is awaiting the result of an inquiry.
I am glad to have had this opportunity to speak in the debate. As I said, there are no magic wands to be waved but there are some practical things to be done. I am not certain that the Government are doing them.

8.39 p.m.

Mr. Eric S. Heffer: The problems of the industry have been well explained by hon. Members on both sides of the House. I think that we all agree that the immediate, short-term problem is to get the industry back to work. I am therefore disappointed, to say the least, by the campaign being conducted by the National Federation of Building Trades Employers against direct labour when it should be much more concerned with trying to obtain more work for direct labour departments and for its members. The federation is adopting a very short-sighted policy.
I wish first to say a few words about the unemployment situation. Like my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin), I have been an operative in the construction industry. Both of us have experienced unemployment in it. It was something that we took for granted. After one job had finished, we would be out of work until the next came along. Sometimes we were fortunate and obtained a job almost the next day, but usually there was a gap, and even in times of so-called full employment, particularly in areas such as the

North-East Coast and Merseyside, we had two, three, or four weeks out of work, whereas workers in London were able to move rapidly from job to job.
Construction workers are not unused to unemployment, but in areas such as mine there are highly skilled tradesmen who have been out of work for 18 months or two years. I am talking not about semi-skilled or unskilled men, but about highly skilled craftsmen who have served apprenticeships for five or seven years but who now have no chance of obtaining jobs in the industry.
They are not likely to be lost to the industry, because there is no work elsewhere for them. This is the tragedy of the situation. They have no other outlet. They are on the dole when they should be putting up buildings and housing in an area that badly needs both. That is the essence of the problem.
My right hon. Friend the Minister for Housing and Construction admitted that the cuts in public expenditure have badly affected the industry. In its economic review, the TUC made it clear that
The General Council believe that the capital public expenditure cuts have been too severe and that in any expansion of public expenditure the construction industry must be given priority.
Similar comment is made in the statement issued by the National Joint Consultative Committee, which is made up of a number of bodies:
The Government should not have reduced public sector construction work so drastically when the industry is already experiencing one of the worst recessions known in this century.
But they did.
I do not accept the view of hon. Members opposite, which I find somewhat hypocritical. I think that I am entitled to argued against public expenditure cuts, because I have consistently argued against them from the minute that Governments have proposed them. It is a bit off for hon. Members opposite to say "The Government are right to make public expenditure cuts, but they have made the wrong ones" and go on to state that it is all right to cut school meals and other services which hit working people. That is not the answer to this problem.
It is certainly not the answer that I and some of my hon. Friends have. We want to see a restoration of public expenditure cuts. The Government have


begun to move. The £100 million spread over two years is not very much, but it is a step in the right direction.
The Secretary of State for the Environment has today given further useful information about the inner cities in an answer to me. That will help develop construction work. But even that is a drop in the ocean. It is right that hon. Members on both sides of the House should constantly press my right hon. Friends to reverse the policy with regard to the construction industry in order to ensure that more public work is available so that we can get these workers back to work in all parts of the British Isles. It is vital that this is done.
The immediate short-term problem is to get the workers back to work. Many suggestions have been made from both sides, with which I agree, and which should be looked at and accepted. But what about the long-term problem? My right hon. Friend said that he would not suggest advocating the nationalisation of the industry, which some people have advocated. I would argue that on a long-term basis public ownership of one form or another is vital for the industry. At this stage I shall not say precisely how it should be done. But it should be done. In the meantime, very important measures can be taken now.
I do not know how many hon. Members—I am sure my building trade colleagues have read "The Ragged Trousered Philanthropist" by Robert Noonan, calling himself Robert Tressel. It is an excellent book. The man is buried in a pauper's grave in my constituency. A headstone, paid for by my union, is to be put on his grave in about two or three weeks' time, and we are having a ceremony and so on.
The important thing is that conditions in the industry have not changed from those described in that book. Of course, there have been improvements. Workers now get paid if there is inclement weather, and there are other benefits, such as holiday payments and so on. But is it not time that we had a scheme of decasualisation in the construction industry?
It is not right that construction workers should have a fall-back position, like the dockers and other workers? It is vital that they have a system of decasualisation.

I believe that to be the next step. It is one of the issues about which the trade unions are concerned. It was pressed for as a necessity in the Labour Party-TUC document "The next three years".
If my right hon. Friends were to come forward with proposals like that, they would find a ready response from the trade union movement because of the need to remove from workers in the industry the constant fear that even in good times they could well be out of a job and find themselves one day earning a good wage and the next day being more or less rock-bottom, even with wage-related benefits.
In the long run we have to go much further. Our industry has been chaotic. We have begun to deal with the lump through the tax measures. That is fine. I am in agreement. But sooner or later we shall need legislation to deal with the lump totally and finally.
We shall need more than that. We shall need to plan the resources in our industry. My right hon. Friend talked about imports and import substitution. We could do a great deal now about import substitution. We need to plan resources on the basis of the development and extension of public ownership. That can be done even with the existence of the private sector. Why should not there be competition between the private and public sectors in the industry?
There are several things we must do. We must get the people back to work and ensure that the public expenditure cuts are reversed. We must step up the house-building programme and ensure that there is a policy of public works throughout the country. We must get the jobs out of the pigeon holes and the workers back to work. On a longer-term basis, we must have a rational policy for the industry through the extension and development of public ownership.

8.51 p.m.

Mr. Stephen Ross: I very much respect the personal knowledge of the hon. Member for Liverpool, Walton (Mr. Heffer) of the industry for which he speaks. He has been consistent in his opposition to public expenditure cuts.
However, I do not think that the hon. Gentleman would expect me to agree with him about the extension of direct labour


at this time, or his ideas for the future nationalisation of the building industry, although I agree that there could be a great deal of modernisation to bring the industry up to date in its industrial attitudes.
I also agree with the Minister to the extent that there is no immediate answer to the present drastic situation affecting the construction industry. I think that those on the Opposition Front Bench would agree that they have no immediate solution either.
I agree with the hon. Member for Ashford (Mr. Speed) about direct labour and that it is time we considered the question of IDCs. If someone wants to run a business in a certain part of the country, it should not matter whether it is in an assistance area. The factory should be built, and he should be able to get on with it. That is the only way in which the country will get out of its economic mess.
I do not go along entirely with those who were so critical about tax exemption certificates and the lump. The cases that I have investigated showed that the Inland Revenue was justified in delaying many decisions. That finding may not apply across the board. Many hon. Members may have different experiences, but what has been going on in the lump deserves much more investigation. It has cost the general public, the person buying a property or having one built, a great deal of money. A gentleman called "Mr Ten per Cent" on the Isle of Wight—I will go no further—has been taking money from every sub-contractor who has come on to a certain site.
The construction industry is in a pretty low state. In some parts of the country its position is nearly disastrous. I am sure that that is so in the North-West, where I believe that 35 per cent. of the employees are out of work, and it is certainly true in the South-West.
I welcome the further £30 million to be concentrated on improvements which the Minister was able to announce tonight. Will he include insulation in the general term "improvement"? I entirely agree with the hon. Member for Rochester and Chatham (Mr. Bean) that that is a means of energy saving and that we could do a great deal more by insulating roof spaces and cavity walls.
There have been far too many bankruptcies among big firms in the building industry over the past few years. The Greaves Organisation, Northern Developments and David Charles are a few examples. Unfortunately, we are told that there are likely to be several more yet.
The bankruptcies are disasterous in themselves, but we must also take into account the effect on employees, on those who put up the finance for the companies, on the suppliers, and on the unfortunate purchasers of the properties that the companies may have been building. I am sure that other hon. Members will have had experience of purchasers of private dwelling houses who have been unable to get their deeds in spite of having parted with over three-quarters of the purchase money. There are some terrifying cases that warrant investigation from a legal point of view.
In many cases companies have brought on their own disasters. For example, there have been injudicious land purchases and a willingness to pay ridiculous rates of interest when it was obvious that there was likely to be a cut-back in demand. The rot set in before February 1974.
There are, however, still openings in the private house-building sector, particularly in the lower price range, for schemes that are imaginative. There are still some openings in the commercial sector. Only last week we read the annual report of Federated Land and Building, which seems to have had a fairly successful year in that sector.
Various hon. Members have put forward ideas in suggesting how the Government can help. In the first instance I should like to see them taking action in respect of the Builders EDC reports—many of us went to the conference when it presented its two reports on construction into the early 1980s. There is a feeling that the Government have been dragging their feet in dealing with the reports.
I should like to see the Government giving instructions to local authorities to release more of their land for joint housing schemes on a long leasehold basis. We hear that there are over 10,000 acres in the London area that could be developed. When public money is in short supply it is a nonsense not to make use of the private finance that is available


for such development. The local authority will get a return, the builder will get employment and somebody will get a home. We should push on very much faster with joint schemes.
We need a much greater concentration of rehabilitation both in housing and in industry. Public money would be well spent on insulation, for example, and the £30 million could go some way towards that.
I happened to be in Andover on Friday. Some £10 million must be spent there on re-roofing houses that were built only 10 years ago. They were all built with flat roofs due to some ridiculous architect who decided, probably from an office in London, that he wanted flat-roofed houses in Andover. Having inspected some of the houses, I can say that they are obviously inadequate. They are leaking and there is rising damp as a result of defective damp-proof courses. I suspect that it is the design that is at fault, although some bad construction is involved. Perhaps we should consider establishing a disaster fund to help some of the authorities that have to put their houses in good order. The local authority is now putting pitched roofs on some of the houses.
It is disastrous that a development that took place only 10 years ago should present such problems. People have had to move out of their homes already because they are defective. This is an area in which the Government will have to come forward with some financial assistance. I cannot see local authorities—not even the GLC—being able to meet the cost off their own bats.
I should like to see the Government attaching greater importance to the views of the Development Commission regarding aids to industry—for example, the building of advance factories and extending depreciation allowances to commercial buildings, which could give an impetus to the development industry. I have in mind warehouses and similar property.
The hon. Member for Folkestone and Hythe (Mr. Costain) has referred to the problem of the many recently qualified civil engineers who are coming into the industry but who lack practical experience. This is because of the shortage of construction jobs from which they may gain practical experience. When the

improvement comes, as undoubtedly it will, there will be a lack of skilled labour to meet the demand that is likely to appear. If we are not careful, we shall be entering a further period of overheating. Many architects are already redundant—though probably some of them should remain redundant. That is not a satisfactory answer and perhaps they could be given constructive work now ready for the improvement which we all hope is not far away.
We should give credit to the big contracting companies, which are doing very well in exports. But they need a sound home base to provide the management experience which their employees require.
Thank goodness, interest rates are coming down. That is something that the Government might say more about in by-elections. They are coming down very fast. This is one of the best things that has happened in recent months. In these circumstances, perhaps it would be possible to make more use of the substantial sums of private money in the institutions—the insurance companies and the banks—and make it available to the construction industry. As I said in the housing debate, that means a more open attitude to the effects of the Rent Acts so that we can get builders starting to build to let again. That would be a major step forward.
The industry seeks a more positive lead from the Government and it deserves to have just that.

9.1 p.m.

Mrs. Renée Short: I shall forbear to answer some of the remarks of the hon. Member for Ashford (Mr. Speed). However, I agree with everything which has been said about the construction industry being used as an economic regulator and the disaster of large numbers of people being unemployed and of young people not having the opportunity to learn building skills. When large numbers are unemployed, the State loses a huge amount in income tax, National Insurance and Health Service contributions, which must be put in the balance against the payment of unemployment benefit.
It is regrettable that when the construction and civil engineering industries are suffering, as they are today, the industries come to a halt. In West Germany, for


example, over 66 per cent. of building is Government-financed. Politicians and construction firms in Germany do not whine. They realise that they could not survive without those contracts.
I want to deal with a subject which has not so far been covered in much detail. That is the problem of how to rejuvenate the building and building materials industries by looking to our overseas markets. There is an enormously important rôle there for the industries.
First, we could export a great deal of know-how. Our architects and consultants now earn about £100 million a year in this way. That is a considerable contribution, but a great deal more could be done. Second, they could earn money by carrying out contracts abroad. Unfortunately, our contractors are not doing as well as the German and French contractors.
Third, we have opportunities in the export of materials and products. Some progress has been and is being made here, but we are held up in EEC countries by the approval schemes, which are being operated, I am sorry to say, with the direct intention of preventing imports. The EEC has not produced a common market for the construction industry. Although I have always been an opponent of the Common Market, we are in and we should benefit from any regulations as much as anyone else.
In 1975, the total product of the Construction industry across the frontiers in the Nine was less than 0·3 per cent., and less than 15 per cent. of the total was exported outside the Common Market, There is a great deal to be done.
In this respect, there should first be a considerable export drive to the developing countries, where, to their credit, many of our largest construction firms and most famous consulting engineers are already doing a great deal. They are active in the Middle East, South America, Asia and Africa.
The fastest developing sector of the industry is ready-mixed concrete and this should be actively encouraged by the Government. Firms should be encouraged to expand their activities and exporting know-how—which I have already mentioned—and also to export construction machinery. There is an enormous

area here in which we can do a great deal of good for ourselves in exporting all kinds of machinery for the building industry, including trucks and lorries. The Government should take that on board.
Our official representatives at embassies abroad must be mobilised to support engineering and construction firms in searching out markets much more than they do at present. A large number of representations have been made to me by architectural and construction firms, particularly in London, who have found difficulty. They say that our representatives abroad are not really interested in making contacts for representatives of construction firms but are generally more interested in making contacts for industrial manufacturing firms and for companies making industrial machinery. They say that the officials do not consider making contacts for representatives of construction firms with Ministers and officials in other countries and that they do not understand the enormous potential of the construction industry or how much they can help by bringing high level executives into contact with Ministers and officials in those countries.
As for the home market, we urgently need legislation to create an effective type approval and quality control scheme on a mandatory basis—that does not now exist—to ensure that innovations, originating from home or abroad, may be used on building sites only if approved by the appropriate testing authority. Here, I suppose it would be the Agrénent Board. This is essential in order to protect the public, public authorities and building owners, using these materials and methods, from dangerous failures of untested materials and components.
This would mean that we should have to introduce mandatory quality control at production level of both materials and components as is done on a small scale at present by the British Standards Institute with the kite mark. However, the kite marking is not mandatory and it does not cover the construction industry. That is a considerable gap that ought to be filled. It would keep out inferior products from abroad, which would be a jolly good thing, and prevent some of the competition that has no basis on quality of material or the product.
For example, it is intolerable that buildings paid for out of public funds should include untested imported steel. Why should this material escape the voluntary controls and standards of home-produced steel? A disaster could occur as a result of that. Some sort of order must be brought into our market for the protection of the consumer and the State. Of course, it will require some expenditure of money, but I suggest that the cost of such an extensive control system—which could be subcontracted out to firms and universities, as is done by the Building Research Establishment, but on a much larger scale—would be offset by the reduction in the risk of a mammoth failure of buildings, because that could cost a fortune to put right. I remind the House of the problem of HAC. We have not yet heard the end of that problem or paid all the bills that will have to be paid to rectify that particular failure.
There has been some publicity recently about calcium chloride having been found in some units even though it is expressly forbidden in the manufacture of pre-stressed concrete units because it can corrode pre-stressed wires and tendons. It has been used by some firms to make more money by reducing the hardening time of pre-stressed units. As with HAC, this may result in our having to find enormous sums for schools and other large buildings. The cost could be astronomic, because we do not yet know the full details.
Some may say that my proposal would be expensive and would mean more controls, but the Germans and the French have had a scheme for component and materials testing for years and the Germans are on the verge of extending their scheme. I recently had the privilege of attending a seminar in West Germany with most of the leading members of the construction industry. The Germans are about to extend their scheme and are doing so with the full approval of the construction industry.
About 2,000 innovations in the building industry receive approval every year under Germany's testing procedure. To their credit, the Germans do not use the scheme to keep out imports—unlike the French who do use their scheme for that purpose.
We are the only Community country with a large construction industry—and a potentially even larger industry—that has no such system to protect clients, the public and public expenditure. It is time that we had such a system.
I surge the Minister to take my suggestions on board and to improve the state of our construction industry by developing exports in every direction, by seeing that our representatives in British Embassies are briefed about what use they could be to construction and civil engineering firms that are anxious to pursue activities abroad and thereby bring money to this country, and to see that we get legislation to enable us to set up the machinery to test materials and components and help us to avoid the crises and disasters that have overtaken the industry in recent years.

9.13 p.m.

Mr. Michael Morris: The speech of the hon. Lady the Member for Wolverhampton, North-East (Mrs. Short) warrants serious attention from the Government and especially from the Secretary of State for Trade. I echo her thoughts about the support that the Industry deserves from the Government, particularly at this time. Judging from my contacts with the industry and the Export Credits Guarantee Department and the British Overseas Trade Board, it seems that the industry is not getting the support it deserves.
I wish to look at some aspects of the action that the Government should be taking to help one of our major industries in its tragic circumstances of supplying one-fifth of our unemployment.
My first plea is to the Secretary of State for the Environment, who has just come into the Chamber, and the Chief Secretary to the Treasury. If the Government wish to make cuts on capital accounts, they should not produce blanket cuts but should give guidance, especially to local authorities, to look more favourably on revenue-raising capital expenditure rather than revenue-using capital expenditure. I am thinking of factories, roads and some areas of housing, rather than those areas, such as social services, that simply eat up revenue. Much work could be done by the Treasury in this area, and I hope that some initiative will be taken.
Hon. Members have already mentioned the dissatisfaction felt about the fact that there has been no progress on the relaxation of industrial development certificates. That would help in the short term. How many times have we heard pleas for a speeding-up of the planning process? Improvements are needed, but so far we have seen little progress. I ask the Minister to look at a number of specific areas where we could expect some beneficial results. Will he look at the results of the Community Land Act and be honest enough to accept that the Act is what we have said it was, a disaster? It would be much better for the industry if the Minister said either that he would repeal the Community Land Act or, recognising that it had been a disaster, that the Government would take some other action.
Will the Minister remove the uncertainty surrounding the Housing Finance Review? He should know that the private housing sector is at present held back because of rumours that the Government are proposing to reduce mortgage tax relief.
Thirdly, there have been references to £30 million for improvement grants. I hope that the Minister will indicate that priority will be given to general improvement areas and housing action areas, not just for those in the inner city areas. It was over a year ago that the Government came to the House and changed the basis of rateable value of conversion to flats. Since then we have seen no progress on private owners' improvement grants There has been submission after submission to the Government stating that these need to be revised and brought up to date. There is much room for initiative in this area at relatively minor cost to Government funds. This would have significant benefit for the construction industry.
There has also been too little initiative until recent weeks on the development corporations. The Secretary of State knows, after visiting the development corporations, that they were held up for several months by inaction in his Department. Even now there is a delaying factor in the work of development corporations, which is causing unemployment in the construction industry. Urgent action is needed here.
The hon. Member for the Isle of Wight (Mr. Ross) may be happy at the 40,000-odd outstanding 714 certificates, but I do not think that many of us who are close to the industry would be happy with that situation. There may be an element of the matter which it is right for the House to review and investigate in depth, but I find it difficult to believe that the number of cases needing investigation is about 40,000. The tragedy is that the Inland Revenue has probably been unable to cope with the sheer numbers involved.
Within these areas the Minister's Department can take some short-term action to get some movement. There have been numerous reports, and it was over a year ago that the Neddy report was presented. It is not too much to ask that the Department should take some initiative to get things moving. We all recognise just how tragic the situation is.
I draw the Minister's attention to the current issue of "Marketing" containing an article about the building materials supplies industry. The concluding paragraph states:
There is also a major problem over new investment.
The Government are particularly concerned about investment. The paragraph continues:
Materials manufacturers will be very cautious for some time about undertaking new investment.
Unless we see urgent action on a range of activities this great industry will be in for a tragic time, and we shall all be the sufferers.

9.19 p.m.

Mr. Eddie Loyden: The fact that the House is debating the construction industry will be welcomed by the industry with one cheer and possibly two. The debate is long overdue. Perhaps the industry will raise a third cheer if any positive action comes from the debate as a result of the raising of the problems.
The Merseyside area is a microcosm of the general housing problem. I accept fully that the housing problem on Merseyside cannot be seen in isolation from the problems of the construction industry or the economy as a whole. But I believe that the Merseyside situation highlights and brings into sharp relief the problems


of the construction industry and the illogicalities—or the apparent illogicalities—that exist, and the great needs that lie behind the requirement for housing and other construction.
The hon. Member for Ashford (Mr. Speed) spoke of the restrictions which apply to the industry. In my view, some of the restrictions are necessary because they are an attempt, however successful or unsuccessful they may be, to channel the resources of the industry into areas of construction where they are needed, and further relaxation of the regulations would, I believe, bring another speculative building bonanza which none of us want to see.
The construction industry in the North-West faces a grave prospect. I remind the House that 50 per cent. of all unemployed construction workers in the North-West are in the Merseyside travel-to-work area. This fact is closely related to the way in which the building industry is connected with or dependent upon the urban renewal which is necessary, and has been necessary for several decades, in cities such as Liverpool and other parts of the North-West as well as elsewhere in the country.
There is an irony here which is felt by all who are involved in this state of affairs. There is a great illogicality in it. During the 1970s, there was, on the one hand, a massive stockpiling of building materials and, on the other, growing unemployment among building workers and a rising waiting list in many of the areas which hon. Members here represent. Although we had that high unemployment among construction workers on Merseyside, and we still have it, there are more than 16,000 identifiable cases on the Liverpool housing committee's waiting list.
Against that background, construction workers cannot accept that there is any logic in the situation, and for that reason I believe that, if some of the points made in this debate are translated into action, the industry will greatly welcome what we have said here today.
The problem with apprentices is not new. I recall the days when I was a member of the Liverpool youth services committee in 1967 and 1968, when approaches were made to the employer's federation about the paucity of apprenticeship

places in the construction industry. What was happening then was a clear indication of what the future held for the construction industry.
I do not for a moment believe that any action which can be taken immediately will bring about the economic effects which some people suspect. In my view, there is no question of overheating the economy. As has been said already, most of our building materials are indigenous. The labour is here, the materials are here and the sites are here. All we need is the final ingredient, that is, someone to bring the strands together to reactivate the industry. It is certainly in a serious plight today, and any continuation of the downward trend can only result not only in an immediate worsening of the situation but in an enormous problem for future recovery.
In my view, the TUC document in 1976 was right to argue that we can take action on this problem almost right away. I do not underestimate the difficulties which face the construction industry generally, but I believe that steps could be taken at once to tackle many of its problems by bringing together the resources, the workers and the land to get on with the job of meeting the desperate need for housing and other building of social priority.
My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) spoke of the importing of materials, the testing of materials, quality control and so on. In my view, it is essential for the Department to come to grips with another problem which is general in the construction industry. After going out to tender, local authorities find themselves with problems of defects and omissions after completion, and they have to pay out large sums of money to remedy such defects in houses, flats and other places. This is a substantial problem locally, and in national terms millions of pounds are involved.
There should also be more stringent examinations during the process of building to ensure that those employed and paid to do a job operate in accordance with the amount that they are paid and the building specifications. We should not accept that local authorities have to spend enormous amounts of money on remedial work.
I welcome the debate. I hope that we shall see positive action by the Government as a result of it. Like my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), I believe that we can plan the construction industry and its resources only by nationalising the industry. The industry should be planned according to the requirements of the nation. We should not tolerate the speculative building of the early 1970s when buildings such as Centre Point were erected. At that time some of the builders working on it were without homes. I hope that the Minister will not reject the proposal to nationalise the industry.

9.27 p.m.

Mr. Kenneth Warren: I shall briefly refer to an aspect which has not been discussed this evening—the training and apprenticeship of building workers through the Construction Industry Training Board. The Board is not directly responsible to the Minister but it is responsible for the training of young people and the retraining of older people who work in the industry. The Minister should get together with the Secretary of State for Education and Science and the Secretary of State for Employment, both of whom have interests in the Board, to examine what is going on and to see how the Board is failing the requirements of the industry.
A small electrical contractor in my constituency cannot get help from the Board because the levy has been raised from £8,000 to £15,000. In that example the head of the firm is the proprietor and has his income deducted from the payroll before qualifying for help. As a director he would not suffer that penalty and would receive help. Out of the 37,000 firms in the industry more than half do not qualify, and yet they need the help most.
Training problems do not relate only to the courses which are arranged and promoted by the Construction Industry Training Board. The Manpower Services Commission and the Training Services Agency are also involved.
Some courses have been suspended because not enough people attend them. In some cases people do not turn up because they can earn more money if they do not attend the courses. There

is a sickness in the training sector of the industry which the Minister, with the Secretary of State for Education and Science and the Secretary of State for Employment, should investigate.
The CITB is not a poor organisation. The report that it produced in 1975 was thick and white. Its 1976 report was thin and glossy and is worth investigating. Over the last three years the Board made a profit of over £11 million. Of that sum about £4 million came from its own investment. That is in an industry in which 200,000 people are out of work. That money should be spent on training people now. The rainy day is here: it is not tomorrow.
If one examines the accounts in detail one finds that the figures differ between one year and the next in the section headed "Administrative and Financial Services". No wonder the number of auditors has doubled in the last three years! It is very difficult to find one's way through these accounts. In 1975 it was said that those services cost £1,011,000. In 1976 it is said that they cost £1,078,000 for the previous year. The figures do not tie up between one year and the next. That is not good enough for an industry which is taking so much from the heart of recovery opportunities.
My last point is that the reason that one wants to investigate these figures is not to be just pedantic or to indulge in semantics but that one finds that the CITB itself is taking bankruptcy action against people who cannot afford to pay the levy. The Board has taken out over 300 bankruptcies against small builders who cannot afford to pay the levy, yet the Board has £11 million of its own resources. I plead with the Minister to look at the practical way in which this money has been taken from those who cannot afford to pay and has been used against them frequently to put them out of work.

9.31 p.m.

Mr. Hugh Rossi: During the course of the debate it is significant that both sides have agreed, without any individual Member speaking to the contrary, that the construction industry is now going through one of the most difficult phases it has ever gone through. We have


heard figures for the number of unemployed—220,000 and rising. We have heard of the number of bankruptcies among construction firms—2,500 a year. We have heard of the number of architects and civil engineers who are suffering extremely badly because of the drop in their work. We have heard about the fact that 1,800 apprentices were made redundant at the end of February. We have heard of the drop in deliveries of materials, the growth of the brick mountain, and the serious drop in overall production. Therefore, it is not surprising that the National Joint Consultative Committee for Building described the construction industry as now going through the most serious recession of the century.
I was a little surprised to find that the Minister was a little complacent in his attitude towards the construction industry. He did not really seem to appreciate the gravity of the situation. He will recall that at one point he sought to correct my hon. Friend the Member for Ashford (Mr. Speed) as to the degree by which production has fallen. My hon. Friend had said that production had fallen by some 30 per cent., or will have fallen by some 30 per cent. by the end of this year, since 1973. The Minister contradicted that and said "No, the figure is 16 per cent., and nothing like 30 per cent. at all."
I think I know where the Minister got his figure. What the Minister has done is to subtract the amount of capital spending for 1977–78 from the amount of capital spending for 1973–74 in housing alone but treated the result as the difference in capital spending for the whole of the construction industry. In housing the figure was 67·3 per cent. of the total construction spending for 1973–74. Today it is 50·6 per cent. of the capital spending. That, no doubt, is how the Minister has arrived at his 16 per cent.
However, in fact both the unions and the employers' organisation are quite clear that the construction industry's contribution to the gross national product will have fallen by about 30 per cent. since 1973—the gravest recession for a century. The Minister cannot laugh that off in any way at all.
Therefore, when the Minister has clearly under-estimated the gravity of the situation—because, clearly, he has not

understood or he has got hold of the wrong figures—it is not surprising to hear him positing as the solution to the construction industry's problems working parties, study groups, consultations, industrial strategy programmes, and the restructuring of the economy. Those are all solutions given by the Minister in his speech. The construction industry does not want any of those things. What it wants is something more simple: it wants work.

Mr. Robert Mellish: I do not quarrel with the hon. Gentleman's figures, but I ask him a straight question. Let us see whether we shall get a straight answer. This is significant in the economic problems that have been facing this nation for some time. Whenever Government cuts occur, they immediately affect the construction industry, because that is where the Government cut on capital projects. I ask the hon. Gentleman this straight question. How will he argue a case when his own party demands that there should be greater cuts in Government expenditure but at the same time it complains about what the present Government have done?

Mr. Rossi: I am sorry that I gave way to the right hon. Gentleman. He has only just come into the Chamber. I gave way in deference to his seniority. That is the last time that I shall give way to anyone, because of the shortage of time.
We have covered this point already, in this debate and the last debate we had on housing. We have explained clearly the distinction in our mind between capital and revenue cuts. There is a world of difference. I shall not waste time by going over the same ground again. The House is familiar with the arguments, which have been adumbrated time and again.
All that the Minister has offered are working parties, strategies, programmes and the rest—but not work. There is one exception, and that is the £30 million for rehabilitation. That is in addition to the £100 million which the Chancellor offered to the inner cities a few weeks ago. That £100 million, spread over two years, was treated with scorn by the industry. The President of the National Federation of Building Trade Employers equated that £50 million a


year with a half-day's work for the industry. The additional £30 million will not give very much work to very many people.
The industry is united in its condemnation of the Government's attitude towards it. The Joint National Consultative Committee for Building states:
Government action has resulted in the construction industry experiencing one of its worst recessions in the century.
The Joint Economic Advisory Panel says:
Construction work will suffer proportionately more than 10 times as severely from public expenditure cuts as all the rest of the public sector put together.
George Smith of UCATT said:
The Government's attitude to the construction industry is painfully clear. It has been singled out, unfairly and unwisely, to bear the brunt of the Government public expenditure cuts.
That is the complaint, that the Government have seen it necessary to make such public expenditure cuts in the present situation. They have singled out, "unfairly and unwisely", the construction industry, with disastrous results. They have not made cuts in other areas where the industry indicated cuts could well be made if they had to be made. We have had this policy of penalising the industry, which is extremely short-sighted.
Construction is investment. It is not consumption. If we have to make economies, they should be made in consumption. The cost of unemployment benefits to the 220,000 now out of work in the building industry could build 20,000 new houses. Most important as my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) said, once the construction industry has been cut back, it finds it difficult to recover. There is a three-year time lag between the conception of a building scheme and its completion. As we have seen time and again, when men leave the industry, they do not return.
The Government have been warned by the Economic Development Committee for Building and Civil Engineering that the level now reached is below the danger level for the construction industry. It is a level that will lead to inefficient use of resources, low productivity, short

working hours, idle plant, unused material and productive capacity, involving high unit costs. That is the consequence of the Government's short-sighted policy in making such savage cuts in this sector.
We accept that at a time of national crisis there must be some retrenchment all round. I am certain that the construction industry would be prepared to bear a fair share of the total cut-back that must take place. It considers—I think rightly—that it has been treated unfairly.
It has been suggested that a minimum survival production programme could be agreed with the industry—a level beyond which we should not fall, with a view to keeping capacity in hand so that the producers of building materials could gauge the extent to which they could keep their plant in operation, the extent to which they should keep in hand potential for the future against the day when there will be an expansion in the economy. This suggestion has been made by many people in the industry, and I hope that the Minister will treat it seriously.
Hon. Members have referred to the potential of overseas contracts. For the year ending March 1976, £1,400 million worth of contracts throughout the world was won by United Kingdom contractors. That was only a small proportion of the amount of work available. For example, Saudi Arabia has a five-year programme for 1975 to 1980 for the staggering sum of £42,000 million. Abu Dhabi has a programme for £5,000 million for 1977 to 1979. There is fierce competition for that work. We are competing against the United States, Japan and even India. South Korea hopes to win contracts worth £1,700 million in the Middle East this year. That is more than the whole of our overseas contracts throughout the world last year. Our skills and expert knowledge do not compare so unfavourably with those of the South Koreans and our other competitors that we should not be able to secure some of these contracts.
However, there is one great difference. Firms in those competing countries receive more Government support than British firms do. In the Middle East contracting is carried out by the Government—there is a preference for Government-to-Government contracts. There is a limited amount of private work available in


Middle East countries for British contractors. As my hon. Friend the Member for North Fylde (Mr. Clegg) said, the Construction Industry Advisory Board, which was set up by the Government to assist British firms, merely advises. Other Governments help firms—

Mr. Mellish: By subsidies.

Mr. Rossi: No. They help in negotiation. As regards bonding, the Government could give British construction firms much greater help. If we consider it to be in the national interest to secure contracts of this type, we should consider granting tax concessions to consultants who go overseas and earn money for Britain. In that way a distinction could be drawn between overseas earnings and earnings arising in Britain. I am sure that if the Government were prepared, not to laugh and joke about the matter, but to treat these suggestions seriously—because they come from the industry—they would go a long way to helping the industry to get out of the present recession.
Other ways in which the Government could help the construction industry have been referred to by my hon. Friend the Member for Ashford and others. One is the abolition of office development permits and industrial development certificates, particularly in the inner city areas, because they are hindering and hampering development in those areas. We should like the Government to do something about the Dobry recommendations on minimising planning delays. Nothing has been done about them, although the Government have had the Dobry Report for some time.
We ask the Government to abolish the Community Land Act. Local authorities are unable to work it because they do not have the money, and the development land tax is discouraging private developers from bringing forward their land for development. There can be no justification for the tax at its present high level. From a revenue point of view it is a nonsense, because in its first year of operation it has cost £95,000 more to levy than the amount of money it has brought in. In addition, it has resulted in the supply of land drying up.
Having listened to the debate, I am not satisfied that the Government have taken seriously enough the condition of

the construction industry or that they have made positive proposals which will help it to solve its difficulties.

9.47 p.m.

The Under-Secretary of State for the Environment (Mr. Kenneth Marks): The hon. Member for Hornsey (Mr. Rossi) started by saying that we all agree that there must be more public support of and public expenditure on the construction industry. The same answer is given in almost every debate. In a debate on education we would be told that we should employ more teachers and should spend more on books. In a debate on social services the same answer would be given by hon. Members on both sides of the House. In a debate on rural transport, there would be demands for more public expenditure on such transport, for which hon. Members opposite have just voted. The hon. Member for Hornsey demanded more Government support of the construction industry. He talked about tax concessions which have already been granted.
This has been a useful debate and many useful suggestions have been made, not only to my Department, but to the Department of Trade and to the Foreign Office. I assure the House that the concern which has been expressed about the problems of the industry is shared by the Government. We are also concerned about the unacceptably high level of unemployment and the loss of capacity, which can well have bad effects later. There have been criticisms of the industry itself, and I hope that the industry will note them.
I congratulate the hon. Member for Ashford (Mr. Speed). He has been much more forthcoming than some of his colleagues in talking about the alternatives to public expenditure. We have heard a great deal from the Opposition about the effect which the cuts in public expenditure are having on the construction industry. It is Conservative policy to reduce public expenditure even further. But, according to the hon. Gentleman, if Conservative policy is carried out, instead of the cuts we have made, parents will face substantial increases in the cost of school meals, there will be substantial increases in bus and rail fares, higher prescription charges and increased rents. The hon. Member for Hornsey mentioned


unemployment benefit, though he did not say whether he would cut it.
I do not know whether the Shadow Environment Ministers have a different policy from that of the Leader of the Opposition or from that of the party in the country, but it will be interesting to learn whether Conservative candidates iii the local elections are tonight demanding increases in the cost to parents of school meals and in bus and rail fares, higher prescription charges and increased rents.
The Government very much regretted the necessity for the measures taken last year which reduced public sector construction programmes. In December we needed to reduce the public sector borrowing requirement quickly and convincingly and the ways of doing so were strictly limited. Cuts in social benefits would have been extremely hard on those least able to bear them. They would not help in any future discussions on pay. Other cuts in revenue expenditure would generally have had a greater effect on employment than capital cuts, as well as being slower to take effect.
On balance the Government believe that the package which emerged was the least objectionable way of securing the necessary savings. The cuts that we made were not the first cuts that the construction industry has seen during the past few years. The hon. Member for Folkestone and Hythe (Mr. Costain) talked about the flywheel effect. We had that effect as a result of the cuts made by the Conservative Government in October 1973 of £100 million, £180 million at current prices. Only two months later, in December 1973, there was another cut of £400 million. A 20 per cent. cut in all capital programmes for three years was made. The total cut in capital expenditure was £850 million.
Conservative Members have talked about a time lag of 18 months in the effect of cuts and advances in public expenditure in the construction industry. That has certainly had an effect over a great length of time. It is true that this Government have made cuts in the past few months, but there have also been increases where they were needed. There was recently the £100 million for the inner cities and the £30 million announced by my hon. Friend today.
The hon. Member for Folkestone and Hythe talked about the need for us to recognise the construction industry and not simply the building industry. I agree with him. One of the problems in the industry has been the cutback in the roads programme. There we had to find a considerable cut, and what was my own Department had to find that cut. The hon. Gentleman also talked about the constant changes in clients' demands. As a Minister with responsibility for the Property Services Agency, I can echo what he says, but it is not confined only to the public sector.
My hon. Friend the Member for Rochester and Chatham (Mr. Bean) made what was acknowledged from the other side as a most valuable speech. It is one that we shall all study carefully. My hon. Friend had many ideas about how to improve backing for the industry. I accept his point about the need for the industry to be ready for an upturn. He also mentioned the question of apprentices, as did other hon. Members. I want to say that the public sector has a finer apprenticeship record than the private sector.
The hon. Member for North Fylde (Mr. Clegg) said that one apprentice had been employed in the whole of his area during a three-month period. I wondered whether the Wyre District Council had a direct labour organisation because if it had it would have found that the record of direct labour organisations throughout the country in the training of apprentices has been the saving of much of the training scheme. The Government have given a high priority to training. They provided an additional £55 million last year to maintain training in industry despite the recession. More than £6 million was allocated to the construction industry. They have taken a range of measures, including the payment of premium grants to employers who recruit more apprentices than their normal intake, and sponsoring initial training themselves by giving training awards.
Such figures as we have suggest that the intake of trainees is holding up, but there has been a problem of redundant apprentices. Special measures have been taken, and so far nearly half of those declared redundant and notified to the CITB have been found alternative jobs.
The hon. Gentleman also mentioned late payments to contractors by public sector clients. In the Property Services Agency we have taken steps to ensure that payments are made promptly, and local authorities have been encouraged to do the same. Quite often the delays are caused by additional claims made by contractors, sometimes not properly substantiated.
My hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Liverpool, Garston (Mr. Loyden) mentioned the particularly serious situation in Merseyside. I visited Merseyside recently in connection with the work that the Property Services Agency is doing on Civil Service dispersal. There is especially in Merseyside the problem of the unemployed skilled worker. Merseyside has a higher proportion of unemployed in general than the rest of the North-West and a much higher proportion of skilled craft workers. We hope that what the Government have tried to do with their policies on inner cities and dispersal and ending the "lump" has contributed towards dealing with the problem.
The hon. Member for Isle of Wight (Mr. Ross) made some interesting comments on his researches into the tax certificate question. There is no doubt that the certificate will have a good effect in helping to get rid of some of the worst practices in the industry.

Mr. Carter-Jones: Mr. Carter-Jones rose—

Mr. Marks: I shall not give way, because I had only about 10 minutes to make this speech. There are only about three minutes to go, and I have many hon. Members to whom I wish to reply.

Mr. Carter-Jones: I have been here all day.

Mr. Marks: The hon. Member for Isle of Wight asked whether the £30 million would cover insulation. Insulation is not covered by grant. It will be largely a question for the local authorities whether

the money is used for insulation in their buildings.

My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) and a number of other hon. Members, in eluding the hon. Member for Hornsey, talked about the need for encouragement of overseas markets. We have been giving encouragement. The Construction Exports Advisory Board, for example, reported in January of this year that it had looked at the adequacy of market intelligence made available by the Government to the construction industry. It has brought to the attention of diplomatic posts abroad the need for information about export opportunities to be notified quickly and to be more closely related to the special requirements of construction exporters. I have taken on board all that was said about the need, and I am sure that my right hon. Friend the Secretary of State for Trade will do the same.

My hon. Friend also asked about type approval schemes and mandatory controls. I assure her that my right hon. Friend is examining the question of type approval, and we shall take it up when necessary.

As a number of hon. Members have said, there is no easy way to solve the industry's problems. There is no panacea. Too sharp an increase in demand would not be in the best interests of the industry or the nation. We saw what happened under the Conservatives, with the escalation of costs and shortages when the industry was over-heated in 1973.

The main boost to the construction industry will come from general economic recovery, which is the prime concern of our economic policies. We are concerned to create an economic climate in which all sectors of industry can plan with confidence, and in which interest rates and inflation are kept down.

Question put, That this House do now adjourn:—

The House divided: Ayes 286, Noes 295.

Division No. 117]
AYES
[9.59 p.m.


Adley, Robert
Beith, A. J.
Boscawen, Hon Robert


Alison, Michael
Bell, Ronald
Bottomley, Peter


Amery, Rt Hon Julian
Bennett, Sir Frederic (Torbay)
Bowden, A. (Brighton, Kemptown)


Arnold, Tom
Bennett, Dr Reginald (Fareham)
Boyson, Dr Rhodes (Brent)


Atkins, Rt Hon H. (Spelthorne)
Benyon, W.
Braine, Sir Bernard


Awdry, Daniel
Berry, Hon Anthony
Brittan, Leon


Bain, Mrs Margaret
Bitten, John
Brocklebank-Fowler, C.


Baker, Kenneth
Biggs-Davison, John
Brooke, Peter


Banks, Robert
Body, Richard
Brotherton, Michael




Brown, Sir Edward (Bath)
Hawkins, Paul
Oppenheim, Mrs Sally


Bryan, Sir Paul
Hayhoe, Barney
Osborn, John


Buck, Antony
Heath, Rt Hon Edward
Page, John (Harrow West)


Budgen, Nick
Hicks, Robert
Page, Rt Hon R. Graham (Crosby)


Bulmer, Esmond
Higgins, Terence L.
Page, Richard (Workington)


Burden, F. A.
Hodgson, Robin
Pardoe, John


Butler, Adam (Bosworth)
Holland, Philip
Parkinson, Cecil


Carlisle, Mark
Hordern, Peter
Pattie, Geoffrey


Chalker, Mrs Lynda
Howe, Rt Hon Sir Geoffrey
Penhaligon, David


Channon, Paul
Howell, David (Guildford)
Percival, Ian


Churchill, W. S.
Howell, Ralph (North Norfolk)
Peyton, Rt Hon John


Clark, Alan (Plymouth, Sutton)
Howells, Geraint (Cardigan)
Pink, R. Bonner


Clark, William (Croydon S)
Hunt, David (Wirral)
Price, David (Eastleigh)


Clarke, Kenneth (Rushcliffe)
Hunt, John (Bromley)
Prior, Rt Hon James


Clegg, Walter
Hurd, Douglas
Pym, Rt Hon Francis


Cockcroft, John
Hutchison, Michael Clark
Raison, Timothy


Cooke, Robert (Bristol W)
Irving, Charles (Cheltenham)
Rathbone, Tim


Cope, John
James, David
Rawlinson, Rt Hon Sir Peter


Cordle, John H.
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rees, Peter (Dover &amp; Deal)


Cormack, Patrick
Jessel, Toby
Rees-Davies, W. R.


Corrie, John
Johnson Smith, G. (E Grinstead)
Reid, George


Costain, A. P.
Jones, Arthur (Daventry)
Renton, Rt Hon Sir D. (Hunts)


Crawford, Douglas
Jopling, Michael
Renton, Tim (Mid-Sussex)


Critchley, Julian
Joseph, Rt Hon Sir Keith
Rhodes James, R.


Crouch, David
Kaberry, Sir Donald
Rhys Williams, Sir Brandon


Crowder, F. P.
Kellett-Bowman, Mrs Elaine
Ridley, Hon Nicholas


Davies, Rt Hon J. (Knutstord)
Kershaw, Anthony
Ridsdale, Julian


Dean, Paul (N Somerset)
Kilfedder, James
Rifkind, Malcolm


Dodsworth, Geoffrey
Kimball, Marcus
Rippon, Rt Hon Geoffrey


Douglas-Hamilton, Lord James
King, Evelyn (South Dorset)
Roberts, Wyn (Conway)


Drayson, Burnaby
King, Tom (Bridgwater)
Rodgers, Sir John (Sevenoaks)


du Cann, Rt Hon Edward
Kitson, Sir Timothy
Ross, Stephen (Isle of Wight)


Durant, Tony
Knight, Mrs Jill
Rossi, Hugh (Hornsey)


Dykes, Hugh
Knox, David
Rost, Peter (SE Derbyshire)


Eden, Rt Hon Sir John
Lamont, Norman
Royle, Sir Anthony


Edwards, Nicholas (Pembroke)
Langford-Holt, Sir John
Sainsbury, Tim


Elliott, Sir William
Latham, Michael (Melton)
Scott, Nicholas


Emery, Peter
Lawrence, Ivan
Scott-Hopkins, James


Evans, Gwynfor (Carmarthen)
Lawson, Nigel
Shaw, Giles (Pudsey)


Ewing, Mrs Winifred (Moray)
Lester, Jim (Beeston)
Shelton, William (Streatham)


Eyre, Reginald
Lewis, Kenneth (Rutland)
Shepherd, Colin


Fairbairn, Nicholas
Lloyd, Ian
Shersby, Michael


Fairgrieve, Russell
Luce, Richard
Silvester, Fred


Farr, John
McAdden, Sir Stephen
Sims, Roger


Fell, Anthony
MacCormick, Iain
Sinclair, Sir George


Finsberg, Geoffrey
McCrindle, Robert
Skeet, T. H. H.


Fisher, Sir Nigel
Macfarlane, Neil
Smith, Dudley (Warwick)


Fletcher, Alex (Edinburgh N)
MacGregor, John
Smith, Timothy John (Ashfield)


Fletcher-Cooke, Charles
Mackay, Andrew James
Speed, Keith


Fookes, Miss Janet
Macmillan, Rt Hon M. (Farnham)
Spence, John


Forman, Nigel
McNair-Wilson, M. (Newbury)
Spicer, Jim (W Dorset)


Fowler, Norman (Sutton C'f'd)
McNair-Wilson, P. (New Forest)
Spicer, Michael (S Worcester)


Fox, Marcus
Madel, David
Sproat, Iain


Fraser, Rt Hon H. (Stafford &amp; St)
Marshall, Michael (Arundel)
Stainton, Keith


Freud, Clement
Marten, Neil
Stanbrook, Ivor


Fry, Peter
Mates, Michael
Stanley, John


Galbraith, Hon T. G. D.
Mather, Carol
Steel, Rt Hon David


Gardiner, George (Reigate)
Maude, Angus
Steen, Anthony (Wavertree)


Gardner, Edward (S Fylde)
Maudling, Rt Hon Reginald
Stewart, Ian (Hitchin)


Gilmour, Rt Hon Sir Ian (Chesham)
Mawby, Ray
Stokes, John


Gilmour, Sir John (East Fife)
Maxwell-Hyslop, Robin
Stradling Thomas, J.


Glyn, Dr Alan
Mayhew, Patrick
Tapsell, Peter


Godber, Rt Hon Joseph
Meyer, Sir Anthony
Taylor, R. (Croydon NW)


Goodhart, Philip
Miller, Hal (Bromsgrove)
Tebbit, Norman


Goodhew, Victor
Mills, Peter
Temple-Morris, Peter


Goodlad, Alastair
Mitchell, David (Basingstoke)
Thatcher, Rt Hon Margaret


Gorst, John
Moate, Roger
Thomas, Dafydd (Merioneth)


Gow, Ian (Eastbourne)
Monro, Hector
Thomas, Rt Hon P. (Hendon S)


Gower, Sir Raymond (Barry)
Montgomery, Fergus
Thompson, George


Grant, Anthony (Harrow C)
Moore, John (Croydon C)
Thorpe, Rt Hon Jeremy (N Devon)


Gray, Hamish
More, Jasper (Ludlow)
Townsend, Cyril D.


Grieve, Percy
Morgan, Geraint
Trotter, Neville


Griffiths, Eldon
Morgan-Giles, Rear-Admiral
van Straubenzee, W. R.


Grimond, Rt Hon J.
Morris, Michael (Northampton S)
Vaughan, Dr Gerard


Grist, Ian
Morrison, Charles (Devizes)
Wakeham, John


Grylls, Michael
Morrison, Hon Peter (Chester)
Walder, David (Clitheroe)


Hall, Sir John
Mudd, David
Walker, Rt Hon P. (Worcester)


Hall-Davis, A. G. F.
Neave, Airey
Walker-Smith, Rt Hon Sir Derek


Hamilton, Michael (Salisbury)
Nelson, Anthony
Wall, Patrick


Hampson, Dr Keith
Neubert, Michael
Walters, Dennis


Hannam, John
Newton, Tony
Warren, Kenneth


Harrison, Col Sir Harwood (Eye)
Normanton, Tom
Watt, Hamish


Hastings, Stephen
Nott, John
Weatherill, Bernard


Havers, Sir Michael
Onslow, Cranley
Wells, John







Whitelaw, Rt Hon William
Wood, Rt Hon Richard
TELLERS FOR THE AYES:


Wiggin, Jerry
Young, Sir G. (Ealing, Acton)
Mr. Spencer Le Marchant and


Wigley, Dafydd
Younger, Hon George
Mr. Michael Roberts.


Winterton, Nicholas






NOES


Abse, Leo
Ellis, Tom (Wrexham)
Loyden, Eddie


Allaun, Frank
English, Michael
Luard, Evan


Anderson, Donald
Ennals, David
Lyon, Alexander (York)


Archer, Peter
Evans, Fred (Caerphilly)
McCartney, Hugh


Armstrong, Ernest
Evans, Ioan (Aberdare)
McDonald, Dr Oonagh


Ashley, Jack
Evans, John (Newton)
McElhone, Frank


Ashton, Joe
Ewing, Harry (Stirling)
MacFarquhar, Roderick


Atkins, Ronald (Preston N)
Faulds, Andrew
McGuire, Michael (Ince)


Atkinson, Norman
Fernyhough, Rt Hon E.
MacKenzie, Gregor


Bagier, Gordon A. T.
Fitch, Alan (Wigan)
Mackintosh John P.


Barnett, Guy (Greenwich)
Fitt, Gerard (Belfast W)
McMillan, Tom (Glasgow C)


Barnett, Rt Hon Joel (Heywood)
Flannery, Martin
McNamara, Kevin


Bates, Alf
Fletcher, Ted (Darlington)
Madden, Max


Bean, R. E.
Foot, Rt Hon Michael
Magee, Bryan


Benn Rt Hon Anthony Wedgwood
Ford, Ben
Maguire, Frank (Fermanagh)


Bennett, Andrew (Stockport N)
Forrester, John
Mahon, Simon


Bidwell, Sydney
Fowler, Gerald (The Wrekin)
Mallalieu, J. P. W.


Bishop, E. S.
Fraser, John (Lambeth, N'w'd)
Marks, Kenneth


Blenkinsop, Arthur
Freeson, Reginald
Marshall, Dr Edmund (Goole)


Boardman, H.
Garrett, John (Norwich S)
Marshall, Jim (Leicester S)


Booth, Rt Hon Albert
Garrett, W. E. (Wallsend)
Maynard, Miss Joan


Boothroyd, Miss Betty
George, Bruce
Meacher, Michael


Bottomley, Rt Hon Arthur
Gilbert, Dr John
Mellish, Rt Hon Robert


Boyden, James (Bish Auck)
Ginsburg, David
Mendelson, John


Bradley, Tom
Golding, John
Mikardo, Ian


Bray, Or Jeremy
Gould, Bryan
Millan, Rt Hon Bruce


Broughton, Sir Alfred
Gourlay, Harry
Miller, Dr M. S. (E Kilbride)


Brown, Hugh D. (Provan)
Graham, Ted
Miller, Mrs Millie (Ilford N)


Brown, Robert C. (Newcastle W)
Grant, George (Morpeth)
Mitchell, Austin Vernon (Grimsby)


Brown, Ronald (Hackney S)
Grant, John (Islington C)
Mitchell, R. C. (Soton, Itchen)


Buchan, Norman
Grocott, Bruce
Molloy, William


Buchanan, Richard
Hamilton, W. W. (Central Fife)
Moonman, Eric


Butler, Mrs Joyce (Wood Green)
Hardy, Peter
Morris, Alfred (Wythenshawe)


Callaghan, Rt Hon J. (Cardiff SE)
Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)


Callaghan, Jim (Middleton &amp; P)
Hart, Rt Hon Judith
Morris, Rt Hon J. (Aberavon)


Campbell, Ian
Hattersley, Rt Hon Roy
Moyle, Roland


Canavan, Dennis
Hatton, Frank
Mulley, Rt Hon Frederick


Cant, R. B.
Hayman, Mrs Helene
Murray, Rt Hon Ronald King


Carmichael, Neil
Healey, Rt Hon Denis
Newens, Stanley


Carter, Ray
Heffer, Eric S.
Noble, Mike


Carter-Jones, Lewis
Hooley, Frank
Oakes, Gordon


Cartwright, John
Horam, John
Ogden, Eric


Castle, Rt Hon Barbara
Hoyle, Doug (Nelson)
O'Halloran, Michael


Ciemitson, Ivor
Huckfield, Les
Orbach, Maurice


Cocks, Rt Hon Michael
Hughes, Rt Hon C. (Anglesey)
Orme, Rt Hon Stanley


Cohen, Stanley
Hughes, Mark (Durham)
Ovenden, John


Coleman, Donald
Hughes, Robert (Aberdeen N)
Padley, Walter


Colquhoun, Ms Maureen
Hughes, Roy (Newport)
Palmer, Arthur


Conlan, Bernard
Hunter, Adam
Park, George


Cock, Robin F. (Edin C)
Irvine, Rt Hon Sir A. (Edge Hill)
Parker, John


Corbett, Robin
Irving, Rt Hon S. (Dartford)
Parry, Robert


Cowans, Harry
Jackson, Colin (Brighouse)
Pavitt, Laurie


Cox, Thomas (Tooting)
Jackson, Miss Margaret (Lincoln)
Pendry, Tom


Craigen, Jim (Maryhill)
Janner, Greville
Perry, Ernest


Crawshaw, Richard
Jay, Rt Hon Douglas
Phipps, Dr Colin


Cronin, John
Jeger, Mrs Lena
Prescott, John


Crowther, Stan (Rotherham)
Jenkins, Hugh (Putney)
Price, C. (Lewisham W)


Cryer, Bob
John, Brynmor
Price, William (Rugby)


Cunningham, G. (Islington S)
Johnson, James (Hull West)
Radice, Giles


Cunningham, Dr J. (Whiteh)
Johnson, Walter (Derby S)
Rees, Rt Hon Merlyn (Leeds S)


Davidson, Arthur
Jones, Alec (Rhondda)
Richardson, Miss Jo


Davies, Bryan (Enfield N)
Jones, Barry (East Flint)
Roberts, Albert (Normanton)


Davies, Denzil (Llanelli)
Jones, Dan (Burnley)
Roberts, Gwilym (Cannock)


Davies, Ifor (Gower)
Kaufman, Gerald
Robertson, John (Paisley)


Davis, Clinton (Hackney C)
Kelley, Richard
Robinson, Geoffrey


Deakins, Eric
Kerr, Russell
Roderick, Caerwyn


Dean, Joseph (Leeds West)
Kilroy-Silk, Robert
Rodgers, George (Chorley)


de Freitas, Rt Hon Sir Geoffrey
Kinnock, Neil
Rodgers, Rt Hon William (Stockton)


Dell, Rt Hon Edmund
Lambie, David
Rooker, J. W.


Dempsey, James
Lamborn, Harry
Roper, John


Doig, Peter
Lamond, James
Rose, Paul B.


Dormand, J. D.
Latham, Arthur (Paddington)
Ross, Rt Hon W. (Kilmarnock)


Douglas-Mann, Bruce
Leadbitter, Ted
Rowlands, Ted


Dunnett, Jack
Lee, John
Ryman, John


Dunwoody, Mrs Gwyneth
Lestor, Miss Joan (Eton and Slough)
Sandelson, Neville


Eadie, Alex
Lever, Rt Hon Harold
Sedgemore, Brian


Edge, Geoff
Lewis, Ron (Carlisle)
Selby, Harry


Edwards, Robert (Wolv SE)
Lipton, Marcus
Shaw, Arnold (Ilford South)


Ellis, John (Brigg &amp; Scun)
Lomas, Kenneth
Sheldon, Rt Hon Robert







Shore, Rt Hon Peter
Thomas, Mike (Newcastle E)
White, James (Pollok)


Short, Mrs Renée (Wolv NE)
Thomas, Ron (Bristol NW)
Whitehead, Phillip


Silkin, Rt Hon John (Deptford)
Thorne, Stan (Preston South)
Whitlock, William


Silkin, Rt Hon S. C. (Dulwich)
Tierney, Sydney
Willey, Rt Hon Frederick


Silverman, Julius
Tinn, James
Williams, Rt Hon Alan (Swansea W)


Skinner, Dennis
Tomney, Frank
Williams, Alan Lee (Hornch'ch)


Small, William
Torney, Tom
Williams, Rt Hon Shirley (Hertford)


Smith, John (N Lanarkshire)
Tuck, Raphael
Williams, Sir Thomas (Warrington)


Snape, Peter
Urwin, T. W.
Wilson, Alexander (Hamilton)


Spearing, Nigel
Varley, Rt Hon Eric G.
Wilson, Rt Hon Sir Harold (Huyton)


Spriggs, Leslie
Wainwright, Edwin (Dearne V)
Wilson, William (Coventry SE)


Stallard, A. W.
Walden, Brian (B'ham, L'dyw'd)
Wise, Mrs Audrey


Stewart, Rt Hon M. (Fulham)
Walker, Harold (Doncaster)
Woodall, Alec


Stoddart, David
Walker, Terry (Kingswood)
Woof, Robert


Stott, Roger
Ward, Michael
Wrigglesworth, Ian


Strang, Gavin
Watkins, David
Young, David (Bolton E)


Strauss, Rt Hon G. R.
Watkinson, John



Summerskill, Hon Dr Shirley
Weetch, Ken
TELLERS FOR THE NOES:


Swain, Thomas
Weitzman, David
Mr. James Hamilton and


Taylor, Mrs Ann (Bolton W)
Wellbeloved, James
Mr. Joseph Harper.


Thomas, Jeffrey (Abertillery)
White, Frank R. (Bury)

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That the Redundancy Rebates Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Coleman.]

Orders of the Day — REDUNDANCY REBATES BILL

As amended (in the Standing Committee), considered.

Clause 1

POWER TO VARY REBATES

10.18 p.m.

Mr. Barney Hayhoe: I beg to move Amendment No. 1, in page 2, line 12, at end insert:
'(4) An order under subsection 1 above which would have the effect of reducing the amount of rebate shall be made only when there is an accumulated excess of liabilities over receipts in the Redundancy Fund'.
The amendment is designed to prevent the Government abusing their position of trust as administrators of the Redundancy Fund by using it as a back-door and rather sneaky way of imposing additional taxation on industry.
The amount involved in what the Government have said is their intention if the Bill becomes law is not much—about £15 million a year is involved—but it is right that the House should be concerned about the matter because important principles are involved.
We see the Government's avowed intention as being to use the mechanism of the Redundancy Fund not for raising money by a general levy upon industry in order to pay part of the redundancy payment to those who are made redundant, but to raise money for their own purposes and to reduce their borrowing requirement.
Although they can use the money by lending it to themselves they cannot spend it on any project, because the Fund is self-contained. The only money that can go into it is a levy raised upon industry and the only money that can be paid out are payments to firms to rebate part of the cost of redundancy payments to individuals.
The amendment will not in any way prevent the proper use by the Government of the power to vary the rebate by order and, as a result of amendments carried in Committee, by order that requires affirmative procedure to be followed. But the amendment will prevent the Government from using that power for purposes other than those directly concerned with redundancy.
The Government would still be able to reduce rebates to make certain that the Fund remained in surplus. If, as a result of payments in and out, it began to run into deficit, the amendment would give the Government power to vary the rebate to get it back into surplus. Under other powers, it could do this in other ways. We are somewhat limited because of the narrowness of the Bill before us, which deals only with variations in the rebate in dealing with matters such as variations in the levy and the amount of redundancy payment made, all of which affect the question whether the Fund is in surplus or deficit.
In our amendment we are trying to give the Government a warning that they should not try to fiddle the Fund—if I may use that expression—for their own economic needs. It should not be used for any purposes other than redundancy. It is absolutely wrong that the Government should be able to use the power that the Bill would give them to act in such a way.
Let us look at the present state of the Fund. In the whole of the current year it has been running into considerable surplus. When the original announcement was made that the Government wished to vary the rebate—which I believe was in July last year—on the available evidence the fund was running into deficit. However, this was because there were some mistakes in the accounting which were put right by a substantial payment into the fund on 31st December 1976. From that moment onwards the Fund has been in surplus. It had a surplus of £5 million last December, £6 million in January, nearly million in February and well over £7 million in March, and the latest figures show that it now has a surplus of more than £10 million.
The whole trend, now that we have the knowledge of what has been going on since the correction was made last


December, is that the Fund is moving into substantial surplus. In these circumstances it would be absolutely wrong for the Government to use the power that the Bill would give them to vary the amount of rebate so as to increase the surplus, unless they accompanied such a move by a reduction in the levy on employers.
If we were prepared to reduce the general burden on industry right across the board, one could see at least some argument for reducing the size of the rebate, but it would be totally wrong for the Government to leave the levy at the present level, which has the Fund moving into a growing surplus, and then reduce the amount of rebate so that it moved even more sharply into surplus.
It may well be that we have not got the nice legalities of wording correct, but I think that the Minister will wholly understand what we are putting forward. I hope that both sides of the House will share our view that the Redundancy Fund mechanism should be used only for the purpose of raising money by a general levy on industry in order to make rebates on the redundancy payments given to individuals.
It would be an improper use of the Fund—and certainly a use that Parliament did not have in mind when the Redundancy Payments Act was passed some years ago—that the Government should use this mechanism for purposes totally unconnected with redundancy and redundancy payments.
The amendment would make that quite clear, at least in principle. If the wording is in some way defective, it can without doubt be put right in another place. I hope that the Minister will accept our view and that the matter can be dealt with either by the amendment or by an undertaking from him. If he is not prepared to do that, I shall certainly urge my right hon. and hon. Friends to divide on the issue.

The Minister of State, Department of Employment (Mr. Harold Walker): If I reply briefly, it is neither to be discourteous nor to suggest that the amendment does not deserve serious consideration. I think that the hon. Member for Brentford and Isleworth (Mr. Hayhoe) will agree that much of the ground that he covered is ground that we

have covered in previous debates. I am not sure that I entirely followed his argument but, in so far as I did, I doubt that his amendment would have the effect which he suggests.
It might be helpful if I tell the House that as at 29th April this year the Fund was in surplus to the tune of about £10·35 million. As the hon. Gentleman said, the surplus has steadily grown since December last.
As the amendment would have the effect of preventing the rebate from being reduced while the Fund was in surplus, if it were adopted it would defeat the immediate purpose of the Bill. We should not find it possible to reduce the rebate to 41 per cent., as we have made clear we propose to do.
Both on Second Reading and in Committee, I pointed out that the Bill would not of itself reduce the rebate. It is essentially an enabling measure. I recall also that, being honest with the House, we have made abundantly clear our intention to introduce an order to reduce the rebate to 41 per cent. as soon as possible after the Bill receives the Royal Assent.
From the point of view of the Opposition, I suppose that the amendment might make sense. The hon. Gentleman will point out that it provides employers with a safeguard against rebate reduction when the Fund is in surplus, and no doubt attempts will be made to show that this is fully consistent with statements made in the House in 1965, which the hon. Gentleman has quoted on previous occasions. But even if such arguments are accepted as having some force, it does not follow that prudent management of the Fund should always involve delaying the reduction of rebate until a state of deficit has occurred. Given a clear trend of expenditure from the Fund, where demands exceed receipts, it might be advisable to reduce the rebate while it was in surplus merely to spread the load. As a matter of judgment, one could envisage circumstances in which it might be sensible to look at the rebate levels before such a deficit occurred.
In the light of statements that we have made on earlier occasions, I think it right to remind the House that circumstances can change. Parliament is entitled to modify its view. We did that in respect


of the insolvency provisions of the Employment Protection Act. Since no objections were raised to that at the time, I think it fair to assume that both sides of the House regarded that change as a sensible use of the Fund.
I think that the present economic situation equally represents a change of circumstances, which calls for a different approach and exceptional measures to ensure a return to economic health and stability. The relatively small saving in public expenditure which will result from the reduction in rebate which we propose will, I think, make a useful contribution towards that economic health. Against that background, it does not seem unreasonable for us to use the Fund in this way and to seek the approval of Parliament to do so.

10.30 p.m.

Mr. James Prior: I do not think that the Minister proved at all convincing. In effect, he said that the Redundancy Fund is now to be used by the Government in order to save borrowing from other sources—in other words, to reduce the Government's borrowing requirement. The plain understanding is that when the Fund is in surplus—as it is now—it will be used by the Government to reduce the amount of borrowing that

they are required to make from other sources. That is what the Minister said.

The Redundancy Fund should not be used for that purpose. It is not the purpose for which it was set up. It was clearly stated that it was an integral fund in its own right and that it should be used only for the purposes of redundancy.

The Fund is in surplus to the tune of £10·3 million. There is no question of its suddenly going into deficit. If the Minister had said that we were right but that there would be circumstances in which the Government should act before it went into deficit, we should have accepted that. But the Minister said that he will lay an order to increase the employer's contribution at a time when the Fund is in surplus. To most reasonable hon. Members that seems to be a misuse of the Fund. It is not consistent with what has been said over a number of years about its purposes.

My right hon. and hon. Friends will wish to show their displeasure of the Government's attitude towards the Fund by voting in favour of the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 226, Noes 244.

Division No. 118]
AYES
[10.32 p.m.


Alison, Michael
Cockcroft, John
Gow, Ian (Eastbourne)


Arnold, Tom
Cope, John
Gower, Sir Raymond (Barry)


Atkins, Rt Hon H. (Spelthorne)
Cormack, Patrick
Grant, Anthony (Harrow C)


Awdry, Daniel
Costain, A. P.
Grieve, Percy


Bain, Mrs Margaret
Crawford, Douglas
Griffiths, Eldon


Baker, Kenneth
Crouch, David
Grimond, Rt Hon J.


Banks, Robert
Davies, Rt Hon J. (Knutsford)
Grist, Ian


Beith, A. J.
Dean, Paul (N Somerset)
Grylls, Michael


Bennett, Sir Frederic (Torbay)
Dodsworth, Geoffrey
Hamilton, Michael (Salisbury)


Bennett, Dr Reginald (Fareham)
Drayson, Burnaby
Hampson, Dr Keith


Benyon, W.
Durant, Tony
Hannam, John


Berry, Hon Anthony
Dykes, Hugh
Hastings, Stephen


Bitten, John
Eden, Rt Hon Sir John
Havers, Sir Michael


Biggs-Davison, John
Edwards, Nicholas (Pembroke)
Hayhoe, Barney


Body, Richard
Emery, Peter
Hicks, Robert


Boscawen, Hon Robert
Ewing, Mrs Winifred (Moray)
Higgins, Terence L.


Bottomley, Peter
Fairgrieve, Russell
Hodgson, Robin


Bowden, A. (Brighton, Kemptown)
Farr, John
Holland, Philip


Braine, Sir Bernard
Fell, Anthony
Hordern, Peter


Brittan, Leon
Finsberg, Geoffrey
Howe, Rt Hon Sir Geoffrey


Brocklebank-Fowler, C.
Fisher, Sir Nigel
Howell, David (Guildford)


Brooke, Peter
Fletcher, Alex (Edinburgh N)
Howell, Ralph (North Norfolk)


Brotherton, Michael
Fletcher-Cooke, Charles
Howells, Geraint (Cardigan)


Brown, Sir Edward (Bath)
Forman, Nigel
Hunt, David (Wirral)


Buck, Antony
Fowler, Norman (Sutton C'f'd)
Hunt, John (Bromley)


Bulmer, Esmond
Fox, Marcus
Hurd, Douglas


Burden, F. A.
Freud, Clement
Hutchison, Michael Clark


Butler, Adam (Bosworth)
Fry, Peter
James, David


Carlisle, Mark
Galbraith, Hon T. G. D.
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Chalker, Mrs Lynda
Gardiner, George (Reigate)
Jessel, Toby


Channon, Paul
Gardner, Edward (S Fylde)
Johnson Smith, G. (E Grinstead)


Churchill, W. S.
Glyn, Dr Alan
Johnston, Russell (Inverness)


Clark, Alan (Plymouth, Sutton)
Godber, Rt Hon Joseph
Jones, Arthur (Daventry)


Clark, William (Croydon S)
Goodhew, Victor
Jopling, Michael


Clarke, Kenneth (Rushclifte)
Goodlad, Alastair
Joseph, Rt Hon Sir Keith


Clegg, Walter
Gorst, John
Kellett-Bowman, Mrs Elaine




Kilfedder, James
Newton, Tony
Sims, Roger


King, Evelyn (South Dorset)
Normanton, Tom
Sinclair, Sir George


King, Tom (Bridgwater)
Nott, John
Skeet, T. H. H.


Knight, Mrs Jill
Onslow, Cranley
Smith, Dudley (Warwick)


Knox, David
Oppenheim, Mrs Sally
Smith, Timothy John (Ashfield)


Lamont, Norman
Osborn, John
Speed, Keith


Latham, Michael (Melton)
Page, John (Harrow West)
Spicer, Jim (W Dorset)


Lawson, Nigel
Page, Rt Hon R. Graham (Crosby)
Spicer, Michael (S Worcester)


Le Marchant, Spencer
Page, Richard (Workington)
Stanbrook, Ivor


Lester, Jim (Beeston)
Pardoe, John
Stanley, John


Lewis, Kenneth (Rutland)
Parkinson, Cecil
Steen, Anthony (Wavertree)


Luce, Richard
Pattie, Geoffrey
Stewart, Rt Hon Donald


MacCormick, Iain
Penhaligon, David
Stewart, Ian (Hitchin)


McCrindle, Robert
Percival, Ian
Stradling Thomas, J.


Macfarlane, Neil
Pink, R. Bonner
Tapsell, Peter


MacGregor, John
Price, David (Eastleigh)
Temple-Morris, Peter


Mackay, Andrew James
Prior, Rt Hon James
Thatcher, Rt Hon Margaret


McNair-Wilson, M. (Newbury)
Pym, Rt Hon Francis
Thomas, Rt Hon P. (Hendon S)


McNair-Wilson, P. (New Forest)
Raison, Timothy
Thompson, George


Madel, David
Rathbone, Tim
Thorpe, Rt Hon Jeremy (N Devon)


Marshall, Michael (Arundel)
Rawlinson, Rt Hon Sir Peter
Townsend, Cyril D.


Marten, Neil
Rees, Peter (Dover &amp; Deal)
Trotter, Neville


Mates, Michael
Rees-Davies, W. R.
van Straubenzee, W. R.


Maudling, Rt Hon Reginald
Renton, Rt Hon Sir D. (Hunts)
Vaughan, Dr Gerard


Mawby, Ray
Renton, Tim (Mid-Sussex)
Wakeham, John


Maxwell-Hyslop, Robin
Rhodes James, R.
Walder, David (Clitheroe)


Mayhew, Patrick
Rhys Williams, Sir Brandon
Walker, Rt Hon P. (Worcester)


Meyer, Sir Anthony
Ridley, Hon Nicholas
Wall, Patrick


Miller, Hal (Bromsgrove)
Ridsdale, Julian
Warren, Kenneth


Mills, Peter
Roberts, Michael (Cardiff NW)
Watt, Hamish


Mitchell, David (Basingstoke)
Roberts, Wyn (Conway)
Weatherill, Bernard


Moate, Roger
Ross, Stephen (Isle of Wight)
Wells, John


Montgomery, Fergus
Rossi, Hugh (Hornsey)
Whitelaw, Rt Hon William


Moore, John (Croydon C)
Royle, Sir Anthony
Wiggin, Jerry


More, Jasper (Ludlow)
Sainsbury, Tim
Winterton, Nicholas


Morris, Michael (Northampton S)
Scott, Nicholas
Young, Sir G. (Ealing, Acton)


Morrison, Charles (Devizes)
Shaw, Giles (Pudsey)



Mudd, David
Shelton, William (Streatham)
TELLERS FOR THE AYES:


Neave, Airey
Shepherd, Colin
Mr. Peter Morrison and


Nelson, Anthony
Shersby, Michael
Mr. Carol Mather


Neubert, Michael
Silvester, Fred





NOES


Abse, Leo
Cryer, Bob
Grant, George (Morpeth)


Allaun, Frank
Cunningham, G. (Islington S)
Grant, John (Islington C)


Anderson, Donald
Cunningham, Dr J. (Whiteh)
Grocott, Bruce


Archer, Peter
Davidson, Arthur
Hamilton, James (Bothwell)


Armstrong, Ernest
Davies, Bryan (Enfield N)
Hardy, Peter


Ashton, Joe
Davies, Denzil (Llanelli)
Harper, Joseph


Atkins, Ronald (Preston N)
Davies, Ifor (Gower)
Harrison, Walter (Wakefield)


Atkinson, Norman
Davis, Clinton (Hackney C)
Hart, Rt Hon Judith


Bagier, Gordon A. T.
Deakins, Eric
Hatton, Frank


Barnett, Guy (Greenwich)
Dean, Joseph (Leeds West)
Hayman, Mrs Helene


Barnett, Rt Hon Joel (Heywood)
de Freitas, Rt Hon Sir Geoffre)
Healey, Rt Hon Denis


Bates, Alt
Dell, Rt Hon Edmund
Heffer, Eric S.


Bean, R. E.
Doig, Peter
Hooley, Frank


Benn, Rt Hon Anthony Wedgwood
Dormand, J. D.
Horam, John


Bennett, Andrew (Stockport N)
Douglas-Mann, Bruce
Hoyle, Doug (Nelson)


Bishop, E. S.
Dunnett, Jack
Huckfield, Les


Blenkinsop, Arthur
Dunwoody, Mrs Gwyneth
Hughes, Rt Hon C. (Anglesey)


Boardman, H.
Eadie, Alex
Hughes, Mark (Durham)


Booth, Rt Hon Albert
Edge, Geoff
Hughes, Roy (Newport)


Boothroyd, Miss Betty
Ellis, John (Brigg &amp; Scun)
Irvine, Rt Hon Sir A. (Edge Hill)


Bradley, Tom
Ellis, Tom (Wrexham)
Irving, Rt Hon S. (Dartford)


Brown, Hugh D. (Provan)
English, Michael
Jackson, Colin (Brighouse)


Blown, Robert C. (Newcastle W)
Ennals, David
Jackson, Miss Margaret (Lincoln)


Brown, Ronald (Hackney S)
Evans, Ioan (Aberdare)
Janner, Greville


Butler, Mrs Joyce (Wood Green)
Evans, John (Newton)
Jay, Rt Hon Douglas


Callaghan, Jim (Middleton &amp; P)
Ewing, Harry (Stirling)
Jenkins, Hugh (Putney)


Cant, R. B.
Faulds, Andrew
John, Brynmor


Carter, Ray
Fitch, Alan (Wigan)
Johnson, James (Hull West)


Carter-Jones, Lewis
Fitt, Gerard (Belfast W)
Johnson, Walter (Derby S)


Cartwright, John
Flannery, Martin
Jones, Alec (Rhondda)


Castle, Rt Hon Barbara
Fletcher, Ted (Darlington)
Jones, Barry (East Flint)


Clemitson, Ivor
Foot, Rt Hon Michael
Jones, Dan (Burnley)


Cocks, Rt Hon Michael
Forrester, John
Kaufman, Gerald


Cohen, Stanley
Fowler, Gerald (The Wrekin)
Kelley, Richard


Coleman, Donald
Fraser, John (Lambeth, N'w'd)
Kilroy-Silk, Robert


Conlan, Bernard
Freeson, Reginald
Kinnock, Neil


Cook, Robin F. (Edin C)
Garrett, John (Norwich S)
Lamborn, Harry


Corbett, Robin
George, Bruce
Lamond, James


Cowans, Harry
Gilbert, Dr John
Latham, Arthur (Paddington)


Craigen, Jim (Maryhill)
Golding, John
Leadbitter, Ted


Crawshaw, Richard
Gould, Bryan
Lestor, Miss Joan (Eton and Slough)


Crowther, Stan (Rotherham)
Graham, Ted
Lever, Rt Hon Harold







Lewis, Ron (Carlisle)
Ovenden, John
Strang, Gavin


Lomas, Kenneth
Palmer, Arthur
Strauss, Rt Hon G. R.


Loyden, Eddie
Park, George
Summerskill, Hon Dr Shirley


Luard, Evan
Parker, John
Swain, Thomas


Lyon, Alexander (York)
Parry, Robert
Taylor, Mrs Ann (Bolton W)


McCartney, Hugh
Pavitt, Laurie
Thomas, Jeffrey (Abertillery)


McDonald, Dr Oonagh
Phipps, Dr Colin
Thomas, Mike (Newcastle E)


McElhone, Frank
Prescott, John
Thomas, Ron (Bristol NW)


MacFarquhar, Roderick
Price, C. (Lewisham W)
Thorne, Stan (Preston South)


McGuire, Michael (Ince)
Price, William (Rugby)
Tierney, Sydney


MacKenzie, Gregor
Radice, Giles
Tinn, James


McNamara, Kevin
Rees, Rt Hon Merlyn (Leeds S)
Tuck, Raphael


Madden, Max
Richardson, Miss Jo
Urwin, T. W.


Magee, Bryan
Roberts, Gwilym (Cannock)
Varley, Rt Hon Eric G.


Maguire, Frank (Fermanagh)
Robinson, Geoffrey
Wainwright, Edwin (Dearne V)


Mahon, Simon
Roderick, Caerwyn
Walden, Brian (B'ham, L'dyw'd)


Mallalieu, J. P. W.
Rodgers, George (Chorley)
Walker, Harold (Doncaster)


Marks, Kenneth
Rodgers, Rt Hon William (Stockton)
Walker, Terry (Kingswood)


Marshall, Dr Edmund (Goole)
Rooker, J. W.
Ward, Michael


Marshall, Jim (Leicester S)
Roper John
Watkins, David


Maynard, Miss Joan
Rose, Paul B.
Watkinson, John


Meacher, Michael
Ross, Rt Hon W. (Kilmarnock)
Weetch, Ken


Mendelson, John
Rowlands, Ted
Wellbeloved, James


Mikardo, Ian
Ryman, John
White, Frank R. (Bury)


Millan, Rt Hon Bruce
Sandelson, Neville
Whitehead, Phillip


Miller, Dr M. S. (E Kilbride)
Sedgemore, Brian
Whitlock, William


Mitchell, Austin Vernon (Grimsby)
Shaw, Arnold (Ilford South)
Williams, Rt Hon Alan (Swansea W)


Mitchell, R. C. (Solon, Itchen)
Sheldon, Rt Hon Robert
Williams, Rt Hon Shirley (Hertford)


Molloy, William
Shore, Rt Hon Peter
Williams, Sir Thomas (Warrington)


Moonman, Eric
Short, Mrs Renée (Wolv NE)
Wilson, Alexander (Hamilton)


Morris, Alfred (Wythenshawe)
Silkin, Rt Hon John (Deptford)
Wilson, William (Coventry SE)


Morris, Charles R. (Openshaw)
Silkin, Rt Hon S. C. (Dulwich)
Wise, Mrs Audrey


Morris, Rt Hon J. (Aberavon)
Silverman, Julius
Woodall, Alec


Moyle, Roland
Skinner, Dennis
Woof, Robert


Mulley, Rt Hon Frederick
Smith, John (N Lanarkshire)
Wrigglesworth, Ian


Newens, Stanley
Snaps, Peter
Young, David (Bolton E)


Noble, Mike
Spearing, Nigel



Oakes, Gordon
Spriggs, Leslie
TELLERS FOR THE NOES


Ogden, Eric
Stallard, A. W.
Mr. Thomas Cox and


O'Halloran, Michael
Stewart, Rt Hon M. (Fulham)
Mr. David Stoddart


Orme, Rt Hon Stanley
Stott, Roger

Question accordingly negatived.

Bill read the Third time and passed.

Orders of the Day — PASSENGER VEHICLES (EXPERIMENTAL AREAS) BILL [Lords]

Ordered,
That it be an Instruction to the Committee to which the Passenger Vehicles (Experimental Areas) Bill [Lords] shall be allocated that they have power to make provision in the Bill to enable motor vehicles to be used on journeys falling partly within and partly outside experimental areas designated in accordance with the Bill.—[Mr. Tinn.]

Orders of the Day — PRICE COMMISSION BILL

Ordered,
That, during the proceedings on the Price Commission Bill, Standing Committee B shall have leave to sit twice on the first day on which it shall meet.—[Mr. Walter Harrison.]

Orders of the Day — PUBLIC ACCOUNTS

Ordered,
That the Standing Order of 18th December 1974 relating to the nomination of the Committee of Public Accounts be amended by leaving out Mr. Robert Kilroy-Silk and inserting Dr. Oonagh McDonald.—[Mr. Walter Harrison.]

Orders of the Day — FISHERY PROTECTION

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

10.45 p.m.

Mr. Michael McNair-Wilson: I am grateful for this chance to discuss the subject of the cost of aerial fishery protection. This is a new role, which was taken on by the Royal Air Force as recently as 1st January this year. It means that the RAF has the task of patrolling the new 200-mile exclusive economic zone which lies around our coasts. It is a very large area to patrol.
In terms of a patrol, I suppose that what these aircraft seek to do is not dissimilar from what the policeman on the beat seeks to do. By his presence he seeks to warn off likely law-breakers from carrying out any unlawful acts. The value of the fishery protection rôle lies in the presence of the aircraft, as with the policeman on the beat. Any trawlers intending to fish in an area in which they have no right to be must be made aware that they face the possibility of being spotted from the air. They must know


that if they are spotted from the air the aircraft that spots them will be able to call up the surface ships that are involved in fishery patrol work, and those surface ships in turn will come to the spot where the law-breaking trawler is to be found and take the necessary action.
Therefore, the aircraft used for this task must be properly equipped to carry out long patrols. The Minister said, in an answer only last week, that the aircraft at present carrying out these patrols are in the air for approximately 180 hours a month. When they see a ship breaking the law, as they think, they must be able to communicate with surface fishery patrol ships. An aircraft carrying out this task must have an all-weather capability. Clearly, as it is flying over sea, perhaps as far as 200 miles out from the coast, it must be able to fly on more than one engine. Therefore, a multi-engined aircraft is required.
The aircraft must carry cameras and radar and must obviously have high-powered radio communications equipment. Those who take part in the patrol must appreciate, as I am sure the RAF crews do, that theirs will be a long and patient task flying for many hours over large stretches of the ocean looking for the law-breaker but perhaps returning to their base having discovered nothing.
As we know from the Minister's statement, the RAF has at present four aircraft specially designated for the aerial fishery protection role. They are four Nimrod Mark Is. The last thing that I wish to do is to cast a slur on this superb aircraft, for no one I have met—and I have had the privilege of flying in a Nimrod—would say other than it is a remarkable aircraft in many ways. But its remarkability lies in the fact that it is a long-range maritime aircraft designed to search out submarines and to protect us against the attack of hostile surface ships. I think no one doubts that that is what it can do. So good is it that it is being earmarked as the British answer to the American AWAC system, which NATO is spending so much time considering.
By anybody's standards Nimrod is a superb aircraft, but I suggest to the Minister that simply to argue that there is a fishery protection role, that the aircraft that we use for maritime surveillance

is the Nimrod and that it therefore follows that that must be the aircraft we should use for the fishery protection role, is to get neither the best out of the Nimrod nor, in cost-effective terms, the best for the British taxpayer.
Those of us who take an interest in defence matters are aware of the great concern that has been caused to the Government over the need to curb defence expenditure and yet to maintain the effectiveness of our defence forces. In the 1977 Defence Estimates the Government spelled out a multiplicity of reasons for making defence cuts of £200 million in 1977–78 and £230 million in 1978–79. Making cuts of that sort in Defence Estimates that anyway were pared to the bone must have been extremely difficult. However, on page 15 of the Estimates for 1977, under the heading "Equipment procurement policy", the Government spelled out two of their considerations when procuring equipment:
The first is the continuing need to contain costs.
Later they said:
The prime objective of British procurement policy has always been to provide the Services, the right time and in an economical way, with the equipment they need…
In aerial fishery protection, the Government are failing to live up to the two considerations that they put in their White Paper. Consequently, they are spending much more on the patrol mission than they need, simply because they have never issued an operational requirement for the sort of aircraft that they need to carry out the 200-mile fishery protection task, nor have they given much thought to other aircraft made in this country which might fulfil that role. They have simply said "We have maritime Nimrods in service. They carry out a long-range search and destroy mission. Let us divert them to the fishery protection role, thereby saving us from having to buy new aircraft." The Government wish to persuade us that that is the solution to the problem.
It is high time, I suggest, that the Minister and his colleagues thought again, because I believe that although they have in the Nimrod a remarkable aircraft they also have a very expensive one. If I may go back to my analogy of the policeman on the beat, I suggest that by using the Nimrod the Ministry has its policeman


on the beat but it has chosen to put him in a Rolls-Royce. Were we to put all our policemen on the beat in Rolls-Royce we would be spending excess money, and I suggest that is what the Government are doing here.
Tonight I want to draw the Minister's attention to another aircraft. I hold no special claim for it, except what I have heard from the manufacturers. But I believe that aircraft, and no doubt other aircraft, are worthy of the Minister's consideration, particularly if he is as concerned about keeping down costs and making practical savings that will not impair the ability of our defence forces as the White Paper would suggest. The aircraft that I want to draw his attention to is the Fairey Britten—Norman Maritime Defender. I am told each Nimrod Mark I costs approximately £7 million. That is in terms of the first version made. I am told that the later versions may cost double that sum. But let us assume that the figure of £7 million is not far off the mark. Four Nimrods, therefore, cost £28 million. By the Minister's own showing, to operate this aircraft for an hour in the fishery protection rôle costs £1,200. To carry out the 45-hour week patrol mission over the year costs about £2·7 million.
However, I was interested to see that David Fairhall of The Guardian, who has flown on a patrol mission, estimated that cost at nearer £5 million. Be that as it may for this particular mission the four Nimrods cost £28 million to buy and £2·7 million, at a conservative estimate, to operate. The Nimrod is a fast and large aircraft, and it is fully equipped, but it is a Rolls-Royce set to do the job of the policeman on the beat.
I want to put forward some points that make me believe that the Maritime Defender would be a better aircraft. I accept that we would need at least 12 such aircraft to do the job of four Nimrods, but I suggest that they would be a great deal cheaper than the four Nimrods and that together all 12 would cost only £3·6 million, with spares. Straight away the sum begins to look rather different. As the Minister knows, in operating terms the company estimates that carrying out an hour's patrol with the Maritime Defender would cost £64. To put £64 against £1,200 makes one ask "Can it really be so much cheaper?". The Minister will

say that we would need 12 Maritime Defenders against four Nimrods. I say "Maybe", but to carry out the same rôle the cost of the patrol mission will be £600,000 for the Maritime Defenders against £2·7 million for the Nimrods.
The Minister may introduce his own figures to the debate later on. If he shoots my figures into the ground, so be it. I am not here to make any party point but simply to talk about taxpayer's money and how it can more usefully be used. On the assumption that my figures are correct, with 12 Maritime Defenders in two years we should have got back the capital cost through the saving in operating the Nimrod.
I submit that the Maritime Defender would carry out the fishery protection role every bit as well as the Nimrod does. Indeed, 12 would give the RAF a flexibility in carrying out the patrol mission that it cannot have with four Nimrods. I acknowledge that the Maritime Defender is a slower and smaller aircraft, but that is not of particular importance. Indeed, the slowness may be a positive advantage when taking photographs of ships that should not be in our waters and sitting over a ship thought to be a law breaker.
The Minister must think again. How much maintenance is required to keep the Nimrods on patrol? The makers of the Maritime Defender tell me that for one hour's flying it needs one hour's maintenance. Can the hon. Gentleman say the same for the Nimrod? Would he argue that the figures I have quoted are not optimistically biased in favour of the Government? Can he say what refitting is to be done to the Nimrod, referred to in the White Paper, which talked about bringing them up to Mark II standards—or are these four not to be refitted? If the Nimrod were withdrawn from fishery protection and another aircraft brought in, would those same Nimrods not be refurbished for the AWACS role?
I suggest that we are spending far more on the task than we need, and that we have not the right aircraft or the right number to carry it out efficiently. The RAF needs not only a fishery protection aircraft but a communications aircraft. If the Minister bought some Maritime Defenders he might find that he had a very versatile little aeroplane that could


carry out that role. If he wonders whether the Maritime Defender has ever been used for coastal work, I remind him that it is used in that rôle in Africa, Latin America and Hong Kong.
Am I right in thinking that some words that the hon. Gentleman used at Question Time in March still hold good? He said then that the Department was considering the costs of fishery protection and that its mind was not completely closed. Will the Minister echo the words of the Secretary of State for Scotland, who said that he would not close his mind to the possibility of chartering commercial aircraft, as he put it, for the fishery protection role when he had had longer to assess the cost of the present aircraft used in that task? I hope that the hon. Gentleman's mind is as open as his right hon. Friend's, because the role will be long term in the RAF's work, and therefore it is one on which we can ill afford to spend more money than necessary.
I am sure that the Minister will agree that there is no good reason to use such a complicated, if superb, aircraft as the Nimrod for such a humdrum job if there is available a rugged, simple, cheap alternative. I suggest that the Fairy Britten-Norman Maritime Defender, assembled in the Isle of Wight, is just such an aeroplane.

11.4 p.m.

The Under-Secretary of State for Defence for the Royal Air Force (Mr. James Wellbeloved): I am glad that through the good fortune of the hon. Member for Newbury (Mr. McNair-Wilson) in winning a place in the Adjournment debate ballot there is an opportunity to report to the House the important work of the Royal Air Force units involved in early surveillance of our exclusive fishery zone.
I very much appreciate the close interest in the operations that many hon. Members on both sides of the House have taken. I am delighted that many of them have been able to fly on operational sorties with one of our RAF crews. The first hon. Members to take part in such flights, in January this year were, appropriately, members of the Trade and Industry Sub-Committee of the Expenditure Committee, who are engaged in an inquiry into the fishing industry. I shall

refer to this inquiry again, but I say now that we welcome the close interest that is being taken in the subject of aerial surveillance and the healthy discussion to which this has given rise.
Another advantage of tonight's debate is that it gives me an opportunity to put on record information about the requirement that the Royal Air Force has to meet for the fisheries departments, the reasons for the choice of aircraft for this role, and what is involved in a fishery surveillance sortie.
First, however, I shall put the fishery protection role into the wider context of what has come to be called the "Offshore Tapestry". Contrary to what the hon. Gentleman has inferred, there are many other tasks that the Nimrod undertakes. The "Offshore Tapestry" is a term coined some years ago to describe the interlinked network of offshore activities round the United Kingdom, in many of which the Armed Forces of the Crown have become involved in one way or another. The metaphor is helpful in that there are several threads to the Government's responsibilities, which interweave with each other. These range from search and rescue in the United Kingdom's flight information region to the treatment of oil pollution round our shores, and from the forecasting of weather to the protection of our oil and gas installations. Some of these interests are traditional.
The House heard last week of a new aspect when, in his statement on the Ekofisk blow-out, the Secretary of State for Energy explained that the Government had offered assistance to Norway, possibly in the form of air surveillance of oil slicks from the Norwegian installation. Although it is now the major thread in the tapestry, fishery protection has to be seen together with the other responsibilities. Furthermore, aerial surveillance for fishery protection is only one strand of the tapestry.
Not only is the range of activities wide; there are many Government Departments, statutory bodies, and private concerns which have needles in this tapestry. I do not want to take this further, but merely to illustrate the complex nature of the whole subject of offshore tapestry, its organisation and management, and the need for careful and maximum co-operation between the many United Kingdom


agencies involved as well as the integrated use of the resources available to carry out the policies of the British Government.
Focusing on the fishery protection rôle and aerial surveillance in particular, the requirement placed on the Ministry of Defence is to help provide the fisheries departments of the Ministry of Agriculture, Fisheries and Food, and the Department of Agriculture and Fisheries for Scotland, with a detailed and continuous picture of the whereabouts of United Kingdom and foreign vessels, both designated and non-designated, within the United Kingdom's expanded fishery limits. This picture is obtained initially by radar sighting from the air, confirmed by visual sightings in each case, information being passed immediately to the fisheries departments, followed-up by photographs of each vessel sighted. This information will form the basis of enforcement action, possibly involving the support of action in the courts in due course.
The area of the United Kingdom's expanded fishery limits is enormous, taking in about 270,000 square miles round our shores. At its farthest point it extends 400 miles west of the Outer Hebrides. Weather conditions may often be savage, both over the Atlantic and in the North Sea. Visibility may be poor and the seas fierce, with the wind at gale force strength. Icing conditions may be critical. To search regularly and rapidly through this area we need a fairly remarkable and robust aricraft, with range and endurance, equipped with reliable communications, radar designed to detect small vessels scattered over a wide area of sea by day and night and in all weathers.
Specifically, we need on board a sophisticated radar with a wide area of sweep for detection and an ability to investigate individual contacts in detail. Furthermore, we need an exceptionally accurate navigation system and an automatic data store and display to hold during the sortie the whereabouts of vessels in the area under surveillance. We need good look-out places for observation and photography, by both day and night, since in winter the northern areas have few hours of daylight. Sorties are long and tiring, so conditions in the aircraft must not be too cramped for the crew. There must be provision for life rafts and

for catering. To avoid wasting time in moving out to areas to be surveyed, and to have the maximum time on task, a high transit speed is necesary.
Back at base—these are facts that the hon. Gentleman does not seem to have taken fully into account—and beyond, we need a fully comprehensive national command and control system for this and other tapestry operations, together with engineering support and facilities for briefing, de-briefing, and training. There must also be secure means for details of the day-to-day needs to be passed on from the Civil Departments and to pass back quickly the intelligence gathered. The whole organisation must be flexible enough to take into account the changing needs of the Civil Departments, which may mean changing plans while the aircraft are in the air, and which may at one time require particular attention to the North Sea, at another to the South Western Approaches, and another the seas round Rockall and the Scottish islands. Yet the fishery task as a whole must be kept broadly under review, and integrated with the other main offshore task—surveillance of the oil and gas rigs—carried out for the Department of Energy.
Consideration of which aircraft to use for this exacting work obviously had to be taken well in advance of the starting date of operations. Several different types of aircraft were reviewed, particularly those in the RAF's inventory at the time, as this would minimise additional cost. RAF aircraft examined included the Argosy, the Andover, and the Hercules. The latter two aircraft would have needed very extensive and expensive modifications to airframe and equipment. The Jetstream was also considered, but its design, endurance, and equipment were considered unsuitable for this particular task. The Nimrod aircraft was chosen for these maritime operations. It was already well equipped for the new task, which is similar to the aircraft's military surface surveillance role. Its radar was designed to detect small targets. It could operate in all weathers, and both by day and by night. The aircraft's communications equipment enables the crews to talk to their shore authorities and ships of the Royal Navy and fishery protection fleet, helicopters,


and other fixed-wing aircraft. We are currently looking to see how we can put in trawler-band radio.
Flying at over 400 knots, the Nimrod quickly reaches its search area, so that, on average, 90 per cent. of its flying time is spent on task. It can change its search area rapidly if needed and surprise trawlers fishing illegally, photographing their activities before they can haul in their nets. In a month, with 180 hours of flying time, about half a million square miles are being surveyed. This means that on a typical sortie the aircraft can locate and identify all fishing vessels within an area of about 25,000 square miles. For an emergency, including search and rescue, all the crew would be needed. That is why we take the view that the already skilled crews should be retained in the Nimrod on these duties. We are most grateful to the fisheries inspectors for the help that they have given us in training and in other respects.
As for capital expenditure, the Nimrod aircraft were available without further cost. And because the same type of aircraft was used for the military maritime rôle, the provision for support, training, and overall control could be met at very little extra cost and complication. Eight aircraft had been ordered as a measure to help employment at the makers at Woodford. It was decided to take four of these and add one to each of the Nimrod operational squadrons, to train all crews in their new duties, and use the Nimrods for the total number of flying hours required of 45 hours a week. In looking at their likely needs in 1974, the fisheries departments concluded that a pattern of five nine-hour sorties a week would enable the surveillance to be carried out.
I want to turn quickly now to the hon. Gentleman's point about the Britten-Norman Maritime Defender. We have not closed our minds to this option or to any other. I can well understand the hon. Member's enthusiasm for this little aircraft. Many of us saw the Defender at the Farnborough Air Show, and I must admit that it has an impressive specification at an appealing price for these days. The firm has done exceedingly well with exports. However, I do not see the Defender as a competitor to Nimrod in the arduous and demanding task that I have described and a cost comparison is not therefore relevant. But there is a range of duties for aircraft that arise from the concept of the "Offshore Tapestry". The fact that the Nimrod is particularly versatile does not rule out the probability that there is a selection of these duties that a small fixed-wing twin-engined aircraft could perform well and economically. It is too early to say what type of air support our fisheries policies will require in the much longer term. The customer Departments have a substantial overall interest in the costs involved, and I am sure that they, too, will be keeping the matter under review.
For the present era, the Nimrod serves excellently in the fishery protection and surveillance rôle, and as the fishermen's evidence to the Trade and Industry Sub-Committee shows—

The Question having been proposed after Ten o'clock and the Debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fifteen minutes past Eleven o'clock.